TIDMFDP
RNS Number : 1695D
FD Technologies PLC
18 October 2022
18 October 2022
FD Technologies plc
("FD Technologies" or the "Group")
Results for the six months ended 31 August 2022
FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) today
announces its interim results for the six months ended 31 August
2022.
Business highlights
Momentum continues, strong growth in KPIs
- Growing momentum in KX reflected in H1 annual recurring revenue (ARR)
growth of 41% and annual contract value signed of GBP11.4m, surpassing
FY22 (GBP9.8m)
- Customer expansion strategy delivering results, with net revenue
retention (NRR) increasing to 119% (H1 FY22: 102%), reflecting the
value our customers achieve through increasing their use of KX
- ARR growth in Industry of 120%, led by new customer wins and expansion
in healthcare, manufacturing and energy, while Financial Services
delivered ARR growth of 35% through new customer wins and upsells
of existing customers to KX Insights
- Growth driven by 51 subscription deals signed (H1 FY22: 41), of which
21 were for KX Insights (H1 FY22: 6), our cloud-first integrated
data management and real-time analytics platform
- Strategic agreement with Microsoft progressing as planned, with joint
marketing initiatives helping to build customer interest and pipeline
ahead of general availability of KX Insights on Azure in H1 2023
- Appointment of Ashok Reddy as KX CEO to deliver product and commercial
strategies that will accelerate growth
- Continued strong growth in First Derivative, ahead of our expectations
and built on our capability to assist clients with their strategic
objectives
- Weaker demand environment at MRP, with measures taken to restore
adjusted EBITDA margin in H2 and building pipeline for Prelytix 3.0
- Increasing FY23 Group revenue guidance to at least GBP300m, while
maintaining adjusted EBITDA guidance to reflect strong KX and First
Derivative performance
Seamus Keating, CEO of FD Technologies, commented: 'The Group
has enjoyed a strong H1, growing revenue and profitability and
laying the foundations for accelerated growth from here. In KX the
momentum we have built since the launch of KX Insights is
delivering results, as evidenced by the 41% growth in annual
recurring revenue. The recent appointment of Ashok Reddy is already
benefiting KX through his significant experience in scaling
product-led enterprise technology businesses. Likewise, First
Derivative maintained its strong growth, while we have taken action
to enable MRP to improve its performance in H2 despite the market
conditions experienced there.
These results demonstrate that our strategy of investing to
accelerate growth is working. We have added significant value to
the Group during H1 as our investments in product, systems and
people are delivering. We are very well placed to continue to
create value, with major growth opportunities ahead.'
Financial summary
Six months to end August 2022 2021 Change
Revenue GBP147.4m GBP128.0m 15%
---------------------------------- ------------------------------- -------
Gross profit GBP60.2m GBP51.7m 16%
---------------------------------- ------------------------------- -------
Profit / (loss) before tax GBP1.1m (GBP1.6m) N/A
---------------------------------- ------------------------------- -------
Reported diluted EPS 2.9p (7.5p) N/A
---------------------------------- ------------------------------- -------
Net debt* GBP7.4m GBP11.7m 37%
---------------------------------- ------------------------------- -------
Adjusted performance measures
---------------------------------- ------------------------------- -------
Adjusted EBITDA** GBP16.0m GBP14.9m 7%
---------------------------------- ------------------------------- -------
Adjusted diluted EPS 14.2p 11.7p 21%
---------------------------------- ------------------------------- -------
Performance against Key FY23 target H1 performance
Performance Indicators
---------------------------------- ----------------------------------------
KX annual recurring revenue (ARR)
growth 35-40% 41%
---------------------------------- ----------------------------------------
KX net revenue retention (NRR) 110% 119 %
---------------------------------- ----------------------------------------
First Derivative revenue growth 15% 22%
---------------------------------- ----------------------------------------
MRP revenue growth 10% (8%)
---------------------------------- ----------------------------------------
* Excluding lease obligations
** Adjusted for share-based payments and restructure and
non-operational
costs
Financial highlights
- Revenue up 15% to GBP147.4m (9% at constant currency), led by performance
at KX and First Derivative both above our full year guidance, balanced
by a reduction in revenue at MRP
- KX returned to growth, with revenue up 19% to GBP37.8m, with ARR
up 41% and now representing 71% of total KX revenue (H1 FY22: 59%)
as we continue to focus on growing our subscription revenue
- First Derivative revenue GBP86.2m, up 22%, driven by our investment
to deliver services that map to our customers' strategic goals and
our strategy to achieve greater value from our deep domain expertise
- MRP revenue down 8% to GBP23.4m, resulting from lower demand for
lead generation activities in the current market conditions
- Adjusted EBITDA GBP16.0m, up 7%, with stronger growth at KX and First
Derivative tempered by a decline at MRP
- Net debt GBP7.4m (H1 FY22: GBP11.7m) after significant investment
in implementation of an Oracle ERP system
Current trading and outlook
The Group is delivering growth in both revenue and
profitability. In KX, the acceleration in ARR in H1 leaves us well
placed to deliver growth in this key metric at the top end of our
range of 35-40%. In First Derivative, while H1 was particularly
strong, we continue to believe that a growth rate of 15% is the
appropriate medium term target, while in MRP we expect revenue to
decline by approximately 8% for the full year.
For the Group's FY23 performance we increase our revenue
guidance and now expect revenue to be at least GBP300m, while
maintaining our adjusted EBITDA guidance in the range of GBP36.5m
to GBP38.5m.
For further information, please contact:
FD Technologies plc +44(0)28 3025 2242
Seamus Keating, Chief Executive Officer www.fdtechnologies.com
Ryan Preston, Chief Financial Officer
Ian Mitchell, Head of Investor Relations
Investec Bank plc
(Nominated Adviser and Broker)
Andrew Pinder
Carlton Nelson
Virginia Bull +44 (0)20 7597 5970
Goodbody (Euronext Growth Adviser
and Broker)
David Kearney
Don Harrington
Finbarr Griffin +353 1 667 0420
FTI Consulting
Matt Dixon
Dwight Burden
Elena Kalinskaya +44 (0)20 3727 1000
About FD Technologies
FD Technologies is a group of data-driven businesses that unlock
the value of insight, hindsight and foresight to drive
organisations forward. The Group comprises KX, the leading
technology for real-time continuous intelligence; First Derivative,
which provides technology-led services in capital markets; and MRP,
the only enterprise-class, predictive Accounts Based Marketing
solution. FD Technologies operates from 14 locations across Europe,
North America and Asia Pacific, and employs more than 3,100 people
worldwide.
For further information, please visit www.fdtechnologies.com and
www.kx.com
Results presentation
FD Technologies will publish a pre-recorded presentation today
at 07.05 BST on its website at
https://fdtechnologies.com/investor-relations/presentations/. The
Group will also host a live results Q&A session for analysts at
09.30 BST today.
Business Review
FD Technologies comprises KX, which operates at the frontier of
real-time data analytics; First Derivative, which provides business
and software engineering solutions for capital markets; and MRP,
which uses KX to deliver predictive analytics for enterprise demand
generation.
KX - at the frontier of real-time data analytics
As industries increasingly adopt real-time decision making, KX
is benefitting from its leading performance in time series data
management and analytics, as well as the work we have done to make
our technology easier to adopt and use. These capabilities, allied
to the investment in our go-to-market strategy, are cementing KX's
place as a core component of a modern data architecture, resulting
in deeper and broader conversations with existing and potential
customers. It is also attracting partners, such as Microsoft, who
see competitive advantage in the ability to deliver real-time and
historical analytics solutions based on KX.
Despite the rapid growth in data generated from machines and
sensors, McKinsey's report 'The Data-driven Enterprise of 2025'
asserts that currently only a fraction of data from connected
devices is ingested, processed, queried and analysed in real-time
due to the limits of legacy technology structures and the high
computational demands of real-time processing. Organisations are
increasingly aware of the benefits of real-time analytics, as
evidenced by Forrester and others, and McKinsey forecasts that by
2025 the challenges will be overcome to enable the creation of vast
networks of real-time data and insights.
KX has the potential to play a central role in the delivery of
time series analytics at scale, particularly as a result of the
investments we made in the past two years to develop and launch KX
Insights, our cloud-first real-time analytics and data management
platform. Our technology is currently a mission critical component
in the most demanding use cases, including the real-time ingestion
and analysis of more than seven billion messages per day at an
Exchange customer, and delivering complex queries on disparate data
sets at a fraction of the cost and more than 25x faster than the
next best option for a healthcare customer. These performance
advantages are typical of the benefits our technology delivers and
with the added benefits of scalability from our cloud partnerships
and the ease of use and rapid time-to-value delivered by KX
Insights we see enormous potential for growth in recurring revenue
in the years ahead.
Appointment of KX CEO
During the period Ashok Reddy was appointed CEO of KX. He brings
a track record of success driving product revenue growth and
commercial strategies at enterprise technology companies (including
IBM, CA Technologies, Broadcom and Digital.Ai) and his priorities
are to use his expertise in driving growth, particularly through
partners, to help KX scale faster.
Microsoft strategic partnership agreement
We are making good progress with our strategic partnership with
Microsoft, signed earlier this year, which positions KX Insights as
the premier real-time analytics technology on Azure. This progress
covers both our go-to-market activities and technical development
as we move towards general availability of KX Insights as a tightly
integrated component within Azure, expected in H1 2023. Ahead of
this, general availability of KX on the Azure platform as either a
customer managed deployment or as a service managed by KX is
expected in Q4 2022.
The Microsoft and KX sales teams have already started working
together to build pipeline, with Microsoft salespeople fully
incentivised to sell KX. A programme to support the sales effort
through joint product marketing and technical support has commenced
and engagement to date has been positive. We already have a number
of customers in private preview of KX Insights on Azure, across
industries including financial services, automotive, healthcare and
industrial IoT. Initial feedback from these clients is extremely
positive, with the rapid time to value and performance they are
achieving increasing our confidence in the potential of KX Insights
on Azure.
The progress and engagement with both Microsoft and potential
customers is encouraging and reinforces the significant potential
of the partnership to deliver KX Insights to a broad user base. We
also continue our joint development work with Microsoft ahead of a
planned launch next year of applications and services for the
financial services sector that are built on KX.
More generally we are seeing strong interest from cloud
platforms in working with us, recognising the unique capabilities
of our technology. Our customers who are moving their KX workloads
to the cloud are driving us to work with their preferred cloud
vendors and this is leading to stronger collaboration with the
leading vendors.
Operational and commercial progress
We continue to make good progress in areas such as product
development and go-to-market as we seek to deliver on the
opportunity for KX. As a result, we saw momentum that enabled us to
deliver more annual contract value in H1 than we did in the whole
of last year, while continuing to increase our pipeline and
investing in our opportunities with partners.
Our focus on rapid time-to-value for our customers is delivering
success and is leading to growth in new opportunities and shorter
sales cycles. While more rapid deployment results in lower
implementation services revenue per customer, it reduces complexity
and cost for customers and increases their return on investment.
Our product and go-to-market priorities are to continue to make KX
easier to adopt and use, in order to drive further growth in
recurring software revenue.
Research and development
The launch last year of KX Insights was a major milestone and
puts KX at the heart of the modern data management landscape for
time series data. KX Insights leverages the benefits of cloud
architecture to deliver rapid, scalable insights without the burden
of managing infrastructure and is built on open standards such as
Docker and Kubernetes, using a microservices-based architecture.
The ability for SQL and Python developers to use their preferred
programming language rather than learn our proprietary q language
is a particularly attractive feature of KX Insights, opening up
opportunities for existing customers to broaden their use of KX and
encouraging adoption by new customers.
In H1 we continued to focus on prioritising ease of adoption and
use, interoperability with other technologies and integration with
partners, particularly hyperscale cloud providers. In particular,
we focused on the deployment of KX Insights on Azure, working with
Microsoft and private preview customers to ensure the optimal
performance of our technology. We also worked to develop
accelerators for our key target markets that will enable customers
to speed up time-to-value by providing common integrations and
business requirements for our customers in those industries.
Go-to-market
We signed 56 new deals during the period, of which 51 (H1 FY22:
41) were subscription deals including 10 new customers, with the
remainder being upsells to existing customers. Churn remained at
low single digits in percentage terms, and together with expansion
from existing customers attracted by the value they derive from KX,
drove NRR of 119%.
Of our new customers, 40% came from Industry, highlighting the
progress we are making in entering new markets. We also saw
significant expansion within our Industry user base, for example
with a healthcare manufacturer expanding its use of KX to more of
its facilities in recognition of the return on investment it has
achieved from KX to date.
First Derivative - business and software engineering solutions
for capital markets
H1 revenue growth of 22% in First Derivative was ahead of our
expectations, driven by our strategy to deliver more value from our
domain and technology expertise together with continuing demand for
key skills and capabilities from our capital markets client base.
We are well placed to continue to assist our clients with their
strategic goals - delivering value from their investment in
technology, meeting their regulatory and compliance imperatives and
digital transformation.
We continue to refocus our strategy in First Derivative away
from hours worked to delivering outcomes for clients, which is
driving deeper engagement and leading to larger revenue projects.
Examples here include transaction reporting and Know Your Customer
where we are now managing ongoing programmes for a number of major
clients.
We invested during the period in equipping more of our
consultants with skills in cloud and real-time data architectures,
to enhance our capability to deliver digital transformation
programmes for our clients. We launched an application development
centre in Poland to support this effort on a global basis,
providing us with the potential to scale significantly in response
to demand.
Our clients continue to focus on getting value for their
technology investment and we are able to help them achieve the
optimal delivery structure through our near shore capabilities,
particularly in Ireland where we are seeing continued growth.
Against these growth drivers, the industry is dealing with the
twin challenges of attrition and wage inflation as banks and
professional services firms compete for talent. To manage these
challenges we provide highly flexible and rewarding careers, with
interesting roles, good career development opportunities and a
sensible work/life balance. Our recruitment and retention
programmes are industry-leading and during the period we continued
to attract both graduates and experienced consultants to assist our
growth ambitions.
MRP - predictive analytics for enterprise demand generation
MRP provides global sales and marketing leaders with an
account-based marketing platform (Prelytix), powered by KX, and
supporting products and services that deliver high response rates
and pipeline conversion. Prelytix tracks more than 1.5 billion
intent signals per day, enabling MRP customers to identify and
engage targets earlier and more effectively. Its global presence is
a further differentiator, resulting in Forrester naming it as a
leader in Account Based Marketing (ABM) in its Q2 2022 report on
the sector.
MRP's customer budgets are lead indicators of macroeconomic
conditions, with spend on lead generation one of the first areas to
be cut since it does not typically affect the business until more
than six months later. Conversely, as economic conditions recover,
customers often rapidly increase their spend on lead generation to
help focus their sales effort. We saw these trends during the
Covid-19 pandemic and again in H1 FY23, with MRP recording an 8%
decline in revenue as customers reduced or suspended their lead
generation activities.
In response, MRP implemented cost savings during the period that
will reduce operating expenses by GBP3.5m on an annualised basis.
These measures, combined with a stabilisation of revenue over the
past quarter, provide us with the confidence that MRP can achieve
our full year revenue guidance.
Prelytix 3.0, the latest version of our platform with enhanced
self-service capabilities, has now been rolled out to our existing
customer base. In H1 we signed several new customers for the
platform and have a solid pipeline of opportunities.
While MRP's H1 performance is disappointing, we continue to
believe it is a leader in an important market and that the measures
we have taken will enable it to return to double digit growth when
economic conditions normalise.
People
The Group currently employs more than 3,100 people, up from more
than 3,000 at the same time last year. Our employee policies are
aimed at making FD Technologies an employer of choice within
technology to support the growth opportunities across the
Group.
During the period we paid particular attention to learning and
development, with a strong focus on leadership, as well as the
Group's culture. We introduced our Aspiring Leadership programme,
which offers a structured and practical path to fast-track high
potential individuals into leadership roles, while we also
appointed leaders to run our talent and people initiatives.
We continue to evolve the ways in which our people connect and
collaborate, building on our latest annual engagement survey which
shows that 80% of our employees feel engaged. We encourage
employees to use offices as business hubs to meet colleagues and
customers and ensure that those at the early stage of their FD
Technologies career are connected with colleagues across the
organisation. We are also seeing and encouraging a gradual
resumption of the social element of work life, which promotes
collaboration and development.
Principal risks and uncertainties
The key principal risks and uncertainties relating to the
Group's operations for the next six months are considered to remain
consistent with those disclosed in the Group's Annual Report and
Accounts 2022. Please refer to pages 29 to 33 thereof which can be
found at
www.fdtechnologies.com/investor-relations/news-results/results-centre/
.
Summary and outlook
KX and First Derivative both delivered strong growth in H1,
ahead of our guidance and are well placed to deliver on their
potential. In KX the growing importance of time series analytics
and our product and commercial strategies are establishing us as a
key component of modern data architecture and driving rapid growth.
First Derivative is well placed to assist customers with their
strategic objectives and delivered growth ahead of our guidance.
MRP's performance was impacted by market conditions, however the
initiatives we have taken are expected to see an improvement in
adjusted EBITDA margin in H2 on revenue similar to H1.
At the Group level we increase our FY23 revenue guidance to at
least GBP300m while maintaining adjusted EBITDA guidance in the
range of GBP36.5m to GBP38.5m.
Financial review
Revenue and Margins
The table below shows the breakdown of Group performance by
business unit for each of KX, First Derivative and MRP.
H1 FY23 H1 FY22
---------------------------------------
Group KX First MRP Group KX First MRP Group
Derivative Derivative change
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 147.4 37.8 8 6.2 23.4 128.0 31.9 70.7 25.3 15%
Cost of sales (87.2) (10.8) (62.7) (13.7) (76.2) (9.8) (51.1) (15.3) 14%
------- ------------ ------- ------- ------------ -------
Gross profit 60.2 27.1 23.4 9.7 51.7 22.1 19.6 10.0 16%
Gross margin 41% 72% 27% 42% 40% 69% 28% 40%
R&D expenditure (11.9) (10.2) (0.1) (1.5) (10.7) (9.5) (0.1) (1.1) 11%
R&D capitalised 10.1 8.4 0.1 1.5 9.3 8.1 0.1 1.1 8%
------- ------------ ------- ------- ------------ -------
Net R&D (1.8) (1.8) 0.0 0.0 (1.4) (1.4) (0.0) (0.0) 31%
Sales and marketing costs (27.1) (14.4) (7.8) (4.9) (25.0) (12.1) (7.9) (5.0) 7%
Adjusted admin expenses (15.4) (5.4) (6.9) (3.1) (10.4) (4.2) (4.7) (1.5) 47%
Adjusted EBITDA 16.0 5.5 8.8 1.7 14.9 4.5 6.9 3.4 7%
Adj. EBITDA margin 11% 14% 10% 7% 12% 14% 10% 14%
The Group delivered growth in both revenue and adjusted EBITDA
driven by factors including strong growth in recurring revenue at
KX, solid growth above our guidance at First Derivative and market
conditions at MRP, added to investments in systems and people and
inflationary cost pressures which increased admin expenses. We
continued to invest in line with our strategic objectives, while
taking steps to ensure MRP returns to growth as quickly as
possible.
Group revenue increased by 15% to GBP147.4m (H1 FY22: GBP128.0m)
while gross margin increased by 1% to 41%, led by a 3% increase at
KX due to a higher proportion of software revenue in the mix.
Revenue growth was boosted during the period by the strength of the
dollar against sterling, our reporting currency, with constant
currency revenue growth of 9%. Due to the natural hedge of our
operations in the US the impact on profitability was marginal.
KX
KX total Financial services Industry
---------------------------- ---------------------------- ----------------------------
H1 FY23 H1 FY22 Change H1 FY23 H1 FY22 Change H1 FY23 H1 FY22 Change
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 37.8 31.9 19% 32.3 27.8 16% 5.6 4.1 36%
Annual recurring 26.8 19.0 41% 23.5 17.5 35% 3.2 1.5 120%
Perpetual 0.8 1.5 (44%) 0.2 0.7 (70%) 0.6 0.8 (19%)
Total software 27.6 20.4 35% 23.8 18.2 30% 3.9 2.2 73%
--------- -------- --------- -------- --------- --------
Services 10.2 11.5 (11%) 8.5 9.6 (11%) 1.7 1.9 (8%)
Gross profit 27.1 22.1 22%
Adjusted
EBITDA 5.5 4.5 22%
KX returned to strong growth in H1, with 41% growth in ARR to
GBP26.8m balanced by an 11% reduction in services to GBP10.2m to
deliver revenue of GBP37.8m, representing growth of 19%. The growth
in ARR is ahead of our expectations, while the reduction in
services revenue reflects our success in making KX Insights easier
to adopt, speeding up the time to value for our customers and
increasing their return on investment. Perpetual license revenue
continued to fall and now represents just 2% of KX revenue as we
complete our planned transition to a subscription model for our
software. Software churn continued to be minimal, at low single
digit percentages.
Financial services revenue grew by 16% to GBP32.3m, with
recurring revenue up 35% as we upsold a number of our existing
customers to KX Insights and added new customers across Europe and
in North America. The revenue uplift from KX Insights upsells is
expected to positively impact performance over the next few years.
We also see significant potential for new financial services
customers to subscribe for the KX Insights platform for its
performance and ease of adoption, particularly for users with SQL
and Python skills. The native integration of these important
developer languages is also leading to conversations with existing
financial services customers regarding extending their use of KX
within their operations.
Industry revenue grew by 36% to GBP5.6m with recurring revenue
growing by 120% to GBP3.2m. Growth was led by subscription
contracts across the energy and manufacturing markets with both new
and existing customers, as well as in pharma.
Alongside the growth in ARR our go-to-market team was also
engaged with the Microsoft team to sign preview customers for KX
Insights on Azure and to build a pipeline of opportunities as we
move closer to the general availability of KX Insights on
Azure.
Performance metrics H1 FY23 H1 FY22 Change
Annual recurring revenue (ARR)
GBPm 26.8 19.0 41%
Exit annual recurring revenue
GBPm 60.2 40.3 49%
Net revenue retention (NRR) 119% 102%
Gross margin 72% 69%
R&D expenditure as % of revenue 27% 30%
Sales and marketing spend
as % of revenue 38% 38%
Adjusted EBITDA margin 14% 14%
The annual contract value signed in the period was GBP11.4m, up
207% on the prior year period (H1 FY22: GBP3.7m) and driven by the
growth in new subscription deals in the period and our work with
partners. This resulted in ARR increasing by 41% to GBP26.8m and
exit ARR increasing by 49% to GBP60.2m. NRR of 119% is ahead of the
102% recorded in H1 FY22 and close to our mid-term goal of more
than 120%. Churn remained minimal during the period while both
upsells to KX Insights from existing customers and expansion across
our customer base boosted this key metric. As we scale, we continue
to see opportunities within our existing customers and have a
pipeline of new customer opportunities.
First Derivative
H1 FY23 H1 FY22 Change
GBPm GBPm
Revenue 86.2 70.7 22%
Gross profit 23.4 19.6 20%
Adjusted
EBITDA 8.8 6.9 27%
Revenue for the period was GBP86.2m, with growth of 22% ahead of
our target of 15%. This reflected a number of factors, including
demand for our services and a skills shortage within capital
markets. We saw the strongest growth in our near shore operations,
which are expanding as our customers pull work from offshore
development centres into centres such as Dublin.
Current attrition and wage inflation rates continue to be
challenges across the industry which we are managing effectively,
although they do limit scope for margin improvement.
We expect demand for our services to continue to be strong, with
regulatory change and digital transformation at the top of our
customers' agenda, while our focus on outcomes and strengthened
customer engagement are also driving growth. However, we remain
cautious around the macroeconomic pressures and the challenges of
recruitment and onboarding in current market conditions. While our
pipeline remains strong, we expect H2 to see revenue growth of 15%,
in line with our view of sustainable growth in this business.
Performance metrics H1 FY23 H1 FY22
--------
Gross margin 27% 28%
Adjusted EBITDA margin 10% 10%
Gross margin fell slightly in H1 due to the costs involved in
recruiting, training and deploying new consultants, mitigated by
our ability to pass through wage inflation and the impact of
delivering greater value from our expertise and domain
knowledge.
MRP
H1 FY23 H1 FY22
GBPm GBPm Change
Revenue 23.4 25.3 (8%)
Platform 12.7 14.0 (9%)
Services 10.7 11.4 (6%)
Gross profit 9.7 10.0 (3%)
Adjusted
EBITDA 1.7 3.4 (51%)
MRP derives revenue from its Prelytix platform, powered by KX,
and data-driven engagement between our customers and their
prospects, either through Prelytix or MRP's services. During the
period, concerns over market conditions caused some of our
customers to pause or reduce their lead generation activity,
leading to a decline in revenue at MRP. This decline occurred
during Q1, with monthly revenue stabilising in Q2 and into early
H2.
As a result of this, adjusted EBITDA during the period decreased
by GBP1.7m from H1 FY22. In response, during H1 MRP implemented
cost savings that will reduce annualised operating costs by c.
GBP3.5m. We expect this to drive an improved performance in
adjusted EBITDA in H2, despite the assumption in our forecast of no
improvement in customer spending in the period.
Performance metrics H1 FY23 H1 FY22
--------
Platform revenue GBPm 12.7 14.0
Gross margin 42% 40%
Adjusted EBITDA margin 7% 14%
Gross margin improved to 42% (H1 FY22: 40%) as we achieved
efficiencies in third party costs incurred in our display marketing
offering. Admin expenses increased as we invested in upgrading
cyber security protection, improved legal capability and incurred
wage inflation as the business prepares for future growth.
Adjusted EBITDA
The reconciliation of operating (loss)/ profit to adjusted
EBITDA is provided below:
H1 FY23 H1 FY22
GBPm GBPm
Operating (loss) /profit (1.0) 1.5
Restructure and non-operational costs 2.5 1.4
Non-operational IT expenses* 2.6 1.1
Share based payment and related costs 0.9 1.1
Depreciation and amortisation 11.0 9.7
------- -------
Adjusted EBITDA 16.0 14.9
*Non-operational IT expenses represents ERP implementation costs
following the IFRIC update on accounting for cloud
implementation
Profit before tax
Adjusted profit before tax was broadly flat at GBP5.0m, with the
increase in adjusted EBITDA balanced by higher depreciation and
software amortisation charges. Financing costs fell by GBP0.3m,
reflecting the decrease in our outstanding loans balanced by the
impact of the stronger dollar on our dollar-denominated interest
payments.
The Group reported a profit before tax of GBP1.1m for the
period, compared to a loss of GBP1.6m in H1 FY22. The major factors
here were the movement in foreign currency translation reflecting
the strength of the dollar in the period and the cost of
implementing the Group's new Oracle ERP system.
The reconciliation of adjusted EBITDA to reported profit before
tax is provided below.
H1 FY23 H1 FY22
GBPm GBPm
Adjusted EBITDA 16.0 14.9
Adjustments for:
Depreciation (3.7) (3.3)
Amortisation of software development costs (5.5) (4.9)
Financing costs (1.7) (2.0)
Finance income - 0.2
Adjusted profit before tax 5.0 4.9
Adjustments for:
Amortisation of acquired intangibles (1.7) (1.5)
Share based payment and related costs (0.9) (1.1)
Restructure and non-operational costs (2.5) (1.4)
Non-operational IT expenses (2.6) (1.1)
Profit / (loss) on foreign currency translation 3.7 (1.4)
Gain on disposal of associate 0.1 -
Reported profit / (loss) before tax 1.1 (1.6)
Earnings per share
The Group reported a profit after tax of GBP0.8m for the period,
compared to a GBP2.1m loss in H1 FY22. Adjusted profit after tax
was GBP4.0m, a 21% increase on the prior period and generating a
21% increase in adjusted diluted earnings per share for the period
to 14.2p.
The calculation of adjusted profit after tax is detailed
below:
H1 FY23 H1 FY22
GBPm GBPm
Reported profit / (loss) before tax 1.1 (1.6)
Tax (0.3) (0.5)
-------- --------
Reported profit / (loss) after tax 0.8 (2.1)
Adjustments from profit / (loss) before tax (as per
the table above) 3.9 6.5
Tax effect of adjustments (0.8) (1.1)
Adjusted profit after tax 4.0 3.3
Weighted average number of ordinary shares (diluted) 28.0m 28.1m
Reported EPS (diluted) 2.9p (7.5p)
Adjusted EPS (diluted) 14.2p 11.7p
Cash generation and net debt
The Group generated GBP12.0m of cash from operating activities
before the exceptional Oracle ERP implementation costs incurred in
H1 FY23 of GBP2.6m, representing a 75% conversion of adjusted
EBITDA. We continued to focus on cash collection and working
capital improvements and the target for the full year from
operating activities cash conversion remains in the range of 80-85%
of adjusted EBITDA .
At the period end, net debt had fallen to GBP7.4m (H1 FY22:
GBP11.7m). The factors impacting the movement in net debt are
summarised in the table below:
H1 FY23 H1 FY22
GBPm GBPm
Opening net cash/(debt) (excluding lease liabilities) 0.3 (9.9)
Cash generated from operating activities before n
on-operational IT expenses 12.0 13.5
Non-operational IT expenses (2.6) (1.1)
-------- --------
Cash generated from operating activities 9.4 12.4
Taxes paid (0.7) (0.5)
Capital expenditure: property, plant and equipment (2.0) (0.2)
Capital expenditure: intangible assets (10.6) (9.6)
Sale/(Acquisition) of other investments and associates 0.1 (0.1)
Issue of new shares 2.6 0.6
Interest, foreign exchange and other (6.6 ) (4.4)
-------- --------
Closing net debt (excluding lease liabilities) (7.4) (11.7)
Cash generated from operating activities is lower due to
investments in the new ERP system and restructuring costs. The
driver of the movement in capital expenditure was an increase in
property, plant and equipment to more typical levels. In addition,
a higher impact from dollar strength has increased our
predominantly dollar-denominated debt, as seen in the foreign
exchange line.
Definition of terms
The Group uses the following definitions for its key
metrics:
Annual recurring revenue (ARR) : The value of recurring software
revenue recognised in the reporting period.
Exit annual recurring revenue: is the value at the end of the
accounting period of recurring software revenue to be recognised in
the next twelve months.
Net revenue retention rate (NRR) : is based on the actual
revenues in the quarter annualised forward to twelve months and
compared to the annualised revenue from the four quarters prior.
The customer cohort is comprised of customers in the quarter that
have generated revenue in the prior four quarters.
Adjusted admin expenses: is a measure used in internal
management reporting which comprises administrative expenses per
the statement of comprehensive income of GBP31.2m (H1 FY22:
GBP23.5m) adjusted for depreciation and amortisation of GBP11.0m
(H1 FY22: GBP9.7m), share based payments and related costs of
GBP0.9m (H1 FY22: GBP1.1m) and restructure and non-operational
costs of GBP2.5m (H1 FY22: GBP1.4m), IT Systems implementation
costs expensed GBP2.6m (H1 FY22: GBP1.1m), and other GBP(1.1)m (H1
FY22: GBP(0.2)m).
Consolidated income statement (unaudited)
Six months ended 31 August
2022 2021
Note GBP'000 GBP'000
3 &
Revenue 4 147,411 127,950
Cost of sales (87,210) (76,209)
Gross profit 60,201 51,741
Operating costs
Research and development costs (11,908) (10,733)
Of which capitalised 10,092 9,347
Sales and marketing costs (27,060) (25,042)
Administrative expenses (31,222) (23,486)
Impairment loss on trade and other receivables (1,162) (345)
Total operating costs 61,260 50,259
Other income 62 46
Operating (loss)/profit (997) 1,528
Finance income 8 248
Finance expense (1,720) (2,011)
Gain/(Loss) on foreign currency translation 3,680 (1,377)
--------- ---------
Net finance income/(costs) 1,968 (3,140)
Profit on sale of Investment 100 -
--------- ---------
Profit/(Loss) before taxation 1,071 (1,612)
Income tax expense 6 (250) (498)
Profit/(Loss) for the period 821 (2,110)
========= =========
Pence Pence
Earnings per share 7
Basic 2.9 (7.6)
Diluted 2.9 (7.5)
Consolidated balance sheet (unaudited)
As at 31 August 2022
As at As at As at
31 August 31 August 28 February
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 28,734 30,612 28,343
Intangible assets and goodwill 173,636 151,655 155,607
Equity accounted investee - 2,681 -
Other financial assets 18,407 16,673 19,676
Trade and other receivables 4,130 3,751 3,745
Deferred tax assets 20,838 17,774 17,998
----------- ----------- -------------
Non-current assets 245,745 223,146 225,369
Trade and other receivables 78,270 63,407 74,029
Current tax receivable 5,566 4,443 4,172
Cash and cash equivalents 44,777 50,828 48,564
----------- ----------- -------------
Current assets 128,613 118,678 126,765
Total assets 374,358 341,824 352,134
=========== =========== =============
Equity
Share capital 8 140 139 139
Share premium 103,359 100,232 100,424
Merger reserve - 8,118 -
Shares option reserve 19,243 17,909 18,404
Fair value reserve 8,393 10,762 9,755
Currency translation adjustment reserve 8,045 (5,014) (3,574)
Retained earnings 68,212 50,586 67,391
----------- ----------- -------------
Equity attributable to shareholders 207,392 182,732 192,539
----------- ----------- -------------
Liabilities
Loans and borrowings 9 65,127 79,644 62,504
Trade and other payables 10 3,799 2,976 3,190
Deferred tax liabilities 16,444 14,507 1 5,307
----------- ----------- -------------
Non-current liabilities 85,370 97,127 81,001
Loans and borrowings 9 9,866 9,245 9,054
Trade and other payables 10 64,073 43,661 60,596
Current tax payable 197 231 382
Employee benefits 7,460 8,828 8,562
Current liabilities 81,596 61,965 78,594
Total liabilities 166,966 159,092 159,595
----------- ----------- -------------
Total equity and liabilities 374,358 341,824 352,134
=========== =========== =============
Consolidated statement of changes in equity (unaudited)
Six months ended 31 August 2022
Share Currency
Share Share option Fair value translation Retained Total
capital premium reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 March 2022 139 100,424 18,404 9,755 (3,574) 67,391 192,539
-------- -------- -------- ---------- ------------ --------- -------
Total comprehensive income
for the period
Profit for the period - - - - - 821 821
Other comprehensive income
Net exchange gain on net investment
in foreign subsidiaries - - - - 15,321 - 15,321
Net exchange loss on hedge
of net investment in foreign
subsidiaries - - - - (3,702) - (3,702)
Net change in fair value of
equity investments at FVOCI - - - (1,362) - - (1,362)
Total comprehensive income
for the period - - - (1,362) 11,619 821 11,078
Transactions with owners
of the Company
Tax relating to share options - - 39 - - - 39
Exercise of share options - - - - - - -
Issue of shares 1 2,935 - - - - 2,936
Share-based payment charge - - 800 - - - 800
Dividends to owners of the - - - - - - -
Company
-------- -------- -------- ---------- ------------ --------- -------
Balance at 31 August 2022 140 103,359 19,243 8,393 8,045 68,212 207,392
Consolidated statement of changes in equity (unaudited)
Six months ended 31 August 2021
Share Currency
Share Share Merger option Fair value translation Retained Total
capital premium reserve reserve reserve adjustment earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 March 2021 139 99,396 8,118 16,790 10,682 (5,628) 53,177 182,674
Total comprehensive income
for the period
(Loss) for the period - - - - - - (2,110) (2,110)
Other comprehensive income
Net exchange gain on net
investment
in foreign subsidiaries - - - - - 964 - 964
Net exchange loss on hedge
of net investment in foreign
subsidiaries - - - - - (350) - (350)
Net change in fair value of
equity investments at FVOCI - - - - (401) - - (401)
Crystalisation of FV loss
on disposal of investment - - - - 481 - (481) -
-------- -------- -------- -------- ---------- ------------ --------- -------
Total comprehensive income
for the period - - - - 80 614 (2,591) (1,897)
Transactions with owners
of the Company
Tax relating to share options - - - 119 - - - 119
Exercise of share options - - - - - - - -
Issue of shares - 836 - - - - - 836
Share-based payment charge - - - 1,000 - - - 1,000
Dividends to owners of the - - - - - - - -
Company
-------- -------- -------- -------- ---------- ------------ --------- -------
Balance at 31 August 2021 139 100,232 8,118 17,909 10,762 (5,014) 50,586 182,732
Consolidated cash flow statement (unaudited)
Six months ended 31 August
2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Profit/(Loss) for the period 821 (2,110)
Adjustments for:
Net finance (income)/costs (1,968) 3,140
Depreciation of property, plant and equipment 3,636 3,202
Amortisation of intangible assets 7,331 6,531
Loss on Disposal of Fixed Assets 3 3
Profit on sale of Investment (100) -
Equity settled share-based payment transactions 800 1,000
Grant income (191) (44)
Tax expense 250 498
--------- --------
10,582 12,220
Changes in:
Trade and other receivables (1,100) 9,182
Trade and other payables (63) (8,975)
--------- --------
Cash generated from operating activities 9,419 12,427
Taxes paid (695) (550)
--------- --------
Net cash from operating activities 8,724 11,877
Cash flows from investing activities
Interest received 8 5
Sale/(Acquisition) of other investments and associates 100 (54)
Acquisition of property, plant and equipment (1,967) (183)
Capitalisation of intangible assets (10,618) (9,625)
Net cash used in investing activities (12,477) (9,857)
Cash flows from financing activities
Proceeds from issue of share capital 2,650 581
Drawdown of loans and borrowings - -
Repayment of borrowings (3,072) (3,377)
Payment of finance lease liabilities (1,928) (1,390)
Interest paid (1,385) (1,733)
Dividends paid - -
--------- --------
Net cash used in financing activities (3,735) (5,919)
Net decrease in cash and cash equivalents (7,488) (3,899)
Cash and cash equivalents at 1 March 48,564 55,198
Effects of exchange rate changes on cash held 3,701 (471)
--------- --------
Cash and cash equivalents at 31 August 44,777 50,828
========= ========
Notes to the Interim Results
1. General information
FD Technologies plc ("FD Technologies", the "Company" or the
"Group") is a public limited company incorporated and domiciled in
Northern Ireland. The Company's registered office is 3 Canal Quay,
Newry BT35 6BP. This condensed consolidated interim financial
information was approved for issue by the Board of Directors on 17
October 2022.
This condensed consolidated interim financial information does
not comprise statutory financial statements within the meaning of
section 434 of the Companies Act 2006. Statutory financial
statements for the year ended 28 February 2022 were approved by the
Board of Directors on 9 May 2022 and delivered to the Registrar of
Companies. The auditors reported on those accounts: their report
was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or
(3) of the Companies Act 2006.
2. Accounting policies
Basis of Preparation
The annual financial statements for the Group will be prepared
in accordance with United Kingdom adopted International Financial
Reporting Standards. This condensed consolidated interim financial
information for the half-year ended 31 August 2022 has been
prepared in accordance with United Kingdom adopted IAS 34, 'Interim
financial reporting'. The interim report does not include all the
notes of the type normally included in an annual financial report.
Accordingly, this report is to be read in conjunction with the
annual financial statements for the year ended 28 February 2022,
which have been prepared in accordance with UK-adopted IFRSs.
This condensed consolidated interim financial information is
unaudited and has not been reviewed by the Company's Auditors.
Except as described below they have been prepared on accounting
bases and policies that are consistent with those used in the
preparation of the financial statements of the Company for the year
ended 28 February 2022.
Going concern
The directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report.
Accordingly, we continue to adopt the going concern basis in
preparing the condensed financial statements.
Changes in accounting policies
The following standards, amendments and interpretations were
effective for accounting periods beginning on or after 1 March 2022
and these have been adopted in the Group financial statements where
relevant:
-- Amendments to IAS 1 Presentation of Financial Statements-Classification
of Liabilities as Current or Non-current
-- Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice
Statement 2 Making Materiality Judgements-Disclosure of Accounting
Policies
-- Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors-Definition of Accounting Estimates
There are no other standards that are not yet effective and that
would be expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.
Critical accounting estimates and judgements
The critical accounting judgements and key sources of estimation
uncertainty are consistent with the Group financial statements for
the year to 28 February 2022 and no additional new uncertainties or
estimation uncertainty have arisen.
Information about critical judgements in applying accounting
policies that have the most significant impact on the amounts
recognised in the financial statements are as follows:
-- In determining Capitalised Internally Developed Software
Costs management will need to apply judgement and evaluate the
technical and commercial feasibility of each product, and the
ability to yield future economic benefits, and assess likelihood of
success, and ability of the Group to complete each product.
Judgements are applied on a product basis in accordance with IAS
38.
-- Management applies judgement in the recognition of revenue,
determining when performance obligations are satisfied, and control
transferred. For software products provided as an annual license,
including the right to regular upgrades, judgement is required when
assessing whether the annual license is a separate performance
obligation from the provision of upgrades to the customer.
Management has assessed that the ongoing updates and upgrades to
the software are fundamental to the value of the software and that
without these updates the value of the software will substantially
deteriorate over time. Therefore, the annual license and the
updates and upgrades are combined as one performance obligation and
revenue is recognised over the life of the license as the service
is delivered.
Information about assumptions and estimation uncertainties that
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities are as follows:
-- Under IFRS goodwill on acquisitions is not amortised but is
tested for impairment on an annual basis. Management has assessed
goodwill for impairment based on the projected profitability of the
individual cash-generating unit to which the goodwill relates. No
impairments have been identified. Other intangibles are being
amortised and tested for impairment if an indicator of impairment
is identified.
-- Management has estimated the fair value of equity investments
and convertible loans. Management has reviewed recent market
activity and has applied a discounted cash flow valuation technique
to assess the fair value of the assets as at year end considering
the forecast revenue and EBITDA, together with forecast exit value
applying market multiples, discounted using a risk-adjusted
discount rate.
Management has assessed that there are no other estimates or
judgements that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
recognised in the financial statements.
Use of non-GAAP measures - Adjusted EBITDA
The Group believes that the consistent presentation of adjusted
Earnings Before Interest, Tax, Depreciation and Amortisation
(EBITDA), adjusted effective tax rate, adjusted basic earnings per
share and adjusted diluted earnings per share provides additional
useful information to shareholders on the underlying trends and
comparable performance of the Group over time. Adjusted EBITDA is
defined as results from operating activities before restructure and
non-operational costs, IT Systems implementation costs expensed,
share based payments and related costs, depreciation of property,
plant and equipment and amortisation of intangible assets, and
non-recurring income from investments. Restructure and
non-operational costs relate to items that are considered
significant in size and non-operational in nature and include
restructuring costs and costs associated with the management of our
equity investment portfolio. The Group uses adjusted EBITDA as an
underlying measure of its performance. A reconciliation between
GAAP and underlying measures is set out in note 5 (Adjusted
EBITDA).
3. Segmental Reporting
Information about reportable segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Chief Executive Officer and
Chief Financial Officer jointly.
The Group is organised into three operating segments (as
identified under IFRS 8 Operating Segments) and generates revenue
through the following activities:
-- KX, which operates at the frontier of real-time data analytics;
-- First Derivative, which provides business and software
engineering solutions for capital markets;
-- MRP, which delivers predictive analytics for enterprise demand generation.
The chief operating decision maker monitors the operating
results of segments separately in order to allocate resources
between segments and to assess performance. Segment performance is
predominantly evaluated based on operating profit before
restructure and non-operational costs, IT Systems implementation
costs expensed , share based payment and related costs,
depreciation and amortisation of intangible assets ('adjusted
EBITDA'). These costs are managed on a centralised basis and
therefore these items are not allocated between operating segments
for the purpose of presenting information to the chief operating
decision maker and accordingly are not included in the detailed
segmental analysis.
Intersegment revenue is not material and thus not subject to
separate disclosure.
KX First Derivative MRP TOTAL
H1 H1 H1 H1 H1 H1 H1 H1
2023 2022 2023 2022 2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue by segment 37,841 31,917 86,150 70,704 23,420 25,330 147,411 127,950
Gross Profit 27,063 22,135 23,410 19,573 9,728 10,034 60,201 51,741
Adjusted EBITDA 5,474 4,486 8,800 6,936 1,691 3,449 15,965 14,871
Restructure and non-operational
costs (2,517) (1,354)
IT systems implementation
costs expensed (2,557) (1,119)
Share based payment and related
costs (921) (1,137)
Depreciation and amortisation (9,261) (8,184)
Amortisation of acquired
intangible assets (1,706) (1,549)
Operating (Loss)/Profit (997) 1,528
Net Finance income/(costs) 1,968 (3,140)
Profit on sale of investment 100 -
Profit/(Loss) before taxation 1,071 (1,612)
Geographical location analysis H1 H1
2023 2022
GBP'000 GBP'000
UK 46,484 34,948
Rest of Europe 28,243 21,885
North America 59,377 56,247
Asia Pacific 13,307 14,870
Total 147,411 127,950
4. Revenue
Disaggregation of revenue
KX First Derivative MRP Total
H1 H1 H1 H1 H1 H1 H1 H1
2023 2022 2023 2022 2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Type of good or service
Sale of goods - perpetual 822 1,464 - - - - 822 1,464
Sale of goods - recurring 26,785 18,975 - - 12,715 13,979 39,500 32,954
Rendering of services 10,234 11,478 86,150 70,704 10,705 11,351 107,089 93,533
-------- -------- --------- -------- -------- -------- -------- --------
37,841 31,917 86,150 70,704 23,420 25,330 147,411 127,950
Timing of revenue recognition
At a point in time 822 1,464 - - - - 822 1,464
Over time 37,019 30,453 86,150 70,704 23,420 25,330 146,589 126,487
-------- -------- --------- -------- -------- -------- -------- --------
37,841 31,917 86,150 70,704 23,420 25,330 147,411 127,950
5. Adjusted EBITDA
H1 H1
2023 2022
GBP'000 GBP'000
Operating (loss)/profit (997) 1,528
Restructure and non-operational costs 2,517 1,354
IT Systems implementation costs 2,557 1,119
Share based payment and related costs 921 1,137
Depreciation and amortisation 10,967 9,733
Adjusted EBITDA 15,965 14,871
6. Tax Expense
The total tax charge for the six months ended 31 August 2022,
including discrete items, is GBP0.3m ( H1 FY22 : GBP0.5m). This tax
charge equates to an effective tax rate of 23.4% ( H1 FY22 :
(30.9%)).
Following on from the 2021 UK Budget, the Government enacted
several legislative changes to corporation tax including an
increase in the rate of corporation tax to 25% from 1 April 2023.
Deferred tax balances have to be measured using the tax rates that
have been substantively enacted and that are expected to apply to
the period when the asset is realised or the liability is
settled.
7. Earnings per Share
Basic earnings per share for the six months ended 31 August 2022
has been calculated on the basis of the reported profit after
taxation of GBP 0.8m (H1 FY22: loss of GBP2.1m) and the weighted
average number of shares for the period of 27,858,836 (H1 FY22:
27,738,539). This provides basic earnings per share of 2.9 pence
(H1 FY22: (7.6) pence).
Diluted earnings per share for the six months ended 31 August
2022 has been calculated on the basis of the reported profit after
taxation of GBP 0.8m (H1 FY22: loss of GBP2.1m) and the weighted
average number of shares after adjustment for the effects of all
dilutive potential ordinary shares 27,990,830 (H1 FY22:
28,026,499). This provides diluted earnings per share of 2.9 pence
(H1 FY22: (7.5) pence).
The Board considers that adjusted earnings is an important
measure of the Group's financial performance. Adjusted earnings in
the period were GBP4.0m (H1 FY22: GBP3.3m), which excludes the
amortisation of acquired intangibles of GBP1.7m, (H1 FY22: GBP1.5m)
share-based payments of GBP0.9m (H1 FY22: GBP1.1m), restructure and
non-operational costs of GBP2.5m (H1 FY22: GBP1.4m), IT systems
implementation costs GBP2.6m (H1 FY22 GBP1.1m), gain on foreign
currency translation of GBP3.7m (H1 FY22: loss GBP1.4m), and
associated taxation impact of these adjustments of GBP0.8m (H1
FY22: GBP1.1m). Using the same weighted average of shares as above
provides adjusted basic earnings per share of 14.3 pence (H1 FY22:
11.8 pence) and adjusted diluted earnings per share of 14.2 pence
(H1 FY22: 11.7 pence).
8. Share capital
During the period the Group issued 190,868 shares as part of
share-based compensation for employees and remuneration. These
increased the number of shares in issue from 27,826,486 to
28,017,354.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
9. Loans and borrowings
31 August 28 February
2022 2022
GBP'000 GBP'000
Current liabilities
Secured bank loans 6,131 5,311
Lease liabilities 3,735 3,743
9,866 9,054
Non-current liabilities
Secured bank loans 46,017 42,925
Lease liabilities 19,110 19,579
65,127 62,504
Repayment of secured bank loans in line with previously
disclosed repayment terms amounted to GBP3.1m.
The group's principal debt facilities totaling GBP52.1m are
provided by a syndicate of banks and expire in 2024.
10. Trade and other payables
31 August 28 February
2022 2022
GBP'000 GBP'000
Current liabilities
Trade payables 11,400 12,833
Other payables 13,655 14,745
Accruals 6,291 5,214
Deferred income 31,908 26,990
Government grants 819 814
64,073 60,596
Non-current liabilities
Government grants 3,799 3,190
3,799 3,190
11. Financial instruments
Fair values
a) Accounting classifications and fair values
Group
The following table shows the carrying amounts and fair values
of financial assets and liabilities. The carrying amount of all
financial assets and liabilities not measured at fair value is
considered to be a reasonable approximation of fair value.
Carrying value
--------------------------------------------------------
Financial
assets
at Other
amortised financial Fair
FVPL FVOCI cost liabilities Total value
31 August 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Level
----------------------------- -------- -------- ----------- ------------- -------- -------- ------
Financial assets
measured
at fair value
Equity securities - 18,407 - - 18,407 18,407 3
Convertible loans 283 - - - 283 283 3
----------------------------- -------- -------- ----------- ------------- -------- -------- ------
283 18,407 - - 18,690 18,690
----------------------------- -------- -------- ----------- ------------- -------- -------- ------
Financial assets
not
measured at fair
value
Trade and other receivables - - 72,433 - 72,433 ([1])
Cash and cash equivalents - - 44,777 - 44,777 ([1])
----------------------------- -------- -------- ----------- ------------- -------- -------- ------
- - 117,210 - 117,210
----------------------------- -------- -------- ----------- ------------- -------- -------- ------
Financial liabilities
not
measured at fair
value
Secured bank loans - - - 52,148 52,148 ([1])
Trade and other payables - - - 56,963 56,963 ([1])
- - - 109,111 109,111
----------------------------- -------- -------- ----------- ------------- -------- -------- ------
(1) Fair value not disclosed as the carrying amounts are
considered to be a reasonable approximation of fair value.
Carrying value
---------------------------------------------------------
Financial
assets
at Other
amortised financial Fair
FVPL FVOCI cost liabilities Total value
28 February 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Level
----------------------------- -------- -------- ----------- ------------- --------- -------- ------
Financial assets
measured
at fair value
Equity securities - 19,676 - - 19,676 19,676 3
Convertible loans 283 - - - 283 283 3
----------------------------- -------- -------- ----------- ------------- --------- -------- ------
283 19,676 - - 19,959 19,959
----------------------------- -------- -------- ----------- ------------- --------- -------- ------
Financial assets
not
measured at fair
value
Trade and other receivables - - 68,030 - 68,030 ([1])
Cash and cash equivalents - - 48,564 - 48,564 ([1])
----------------------------- -------- -------- ----------- ------------- --------- -------- ------
- - 116,594 - 116,594
----------------------------- -------- -------- ----------- ------------- --------- -------- ------
Financial liabilities
not
measured at fair
value
Secured bank loans - - - (48,236) (48,236) ([1])
Trade and other payables - - - (50,386) (50,386) ([1])
- - - (98,622) (98,622)
----------------------------- -------- -------- ----------- ------------- --------- -------- ------
(1) Fair value not disclosed as the carrying amounts are
considered to be a reasonable approximation of fair value.
b) Measurement of fair values
Group
Outside of external market events that showed a material change
to the fair value of investment valuations, as reflected in the
table below, no other indicators have arisen from the valuation
model to indicate a change to the measurement of fair values of
investments.
Reconciliation of Level 3 fair value:
Group
Convertible Unquoted
loans equities
GBP'000 GBP'000
Balance at 1 March 2022 283 19,676
Adjustments to fair value - (1,609)
Foreign exchange gain - 340
--------------------------- ------------ ---------
Balance at 31 August 2022 283 18,407
--------------------------- ------------ ---------
Convertible Unquoted
loans equities
GBP'000 GBP'000
Balance at 1 March 2021 3,122 14,760
Purchases - 5,106
Disposals (2,311) (699)
Adjustments to fair value - (95)
Transfers (521) 521
Foreign exchange gain (7) 83
----------------------------- ------------ ---------
Balance at 28 February 2022 283 19,676
----------------------------- ------------ ---------
12. Subsequent Events Note
There were no subsequent events at signing date.
13. Interim Report
Copies can be obtained from the Company's head and registered
office: 3 Canal Quay, Newry, Co. Down, BT35 6BP and are available
to download from the Company's web site www.fdtechnologies.com
.
14. Responsibility Statement
The Directors confirm that to the best of their knowledge:
a) the condensed set of financial statements has been prepared
in accordance with UK-adopted IAS 34 'Interim Financial
Reporting';
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
and their impact during the first six months and description of
principal risks and uncertainties for the remaining six months of
the year); and
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Directors of FD Technologies plc are listed in the Company's
Report and Accounts for the year ended 28 February 2022. A list of
current Directors is maintained on the FD Technologies plc website:
www.fdtechnologies.com .
15. Forward Looking Statements
The financial information contained in this announcement has not
been audited. Certain statements made in this announcement are
forward-looking statements. Undue reliance should not be placed on
such statements, which are based on current expectations and are
subject to a number of risks and uncertainties that could cause
actual results to differ materially from any expected future
results in forward-looking statements.
The Company accepts no obligation to publicly revise or update
these forward-looking statements or adjust them to future events or
developments, whether as a result of new information, future events
or otherwise, except to the extent legally required.
This information is provided by RNS, the news service of the
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END
IR BRBDGSGBDGDR
(END) Dow Jones Newswires
October 18, 2022 02:00 ET (06:00 GMT)
FD Technologies (AQSE:FDP.GB)
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