TIDMPEB
RNS Number : 2522U
Pebble Beach Systems Group PLC
28 March 2019
Pebble Beach Systems Group plc
Results for the year ended 31 December 2018
Pebble Beach Systems Group plc, a leading global software
business specialising in solutions for playout automation and
content serving customers in the broadcast markets, today announces
its final results for the year ended 31 December 2018.
Financial Headlines
2018 2017
------------------------------------------- ---------- -----------
Order Intake GBP10.8m GBP10.5m
Revenues GBP9.2m GBP10.3m
Gross Margin GBP6.7m GBP6.5m
73% 63%
Adjusted EBITDA* GBP2.5m GBP0.5m
% of Revenues 27% 5%
Adjusted earnings/(loss) per share* 1.6p (0.2)p
Net cash inflow from operating activities GBP1.7m GBP(2.6)m
Headlines
-- Full year results ahead of management expectations
-- Order intake and outlook for 2019 strong
-- Gross margin improved materially to 73% (2017: 63%)
-- Adjusted* EBITDA improved materially to GBP2.5 million (2017: GBP0.5 million)
-- Net cash inflow from operating activities improved materially
to GBP1.7m (2017: GBP2.6m outflow)
-- Extension to the bank credit facility until 30 November 2020,
providing a stable capital base
-- Net debt reduced from GBP10.3 million to GBP9.4 million during the year
*Adjusted EBITDA, a non-GAAP measure, is EBITDA before
non-recurring items and foreign exchange gains. Adjusted earnings
per share is calculated on the same basis after taking account of
related tax effects.
John Varney, Non-Executive Chairman of Pebble Beach Systems
Group plc, said:
"This is an exciting time for Pebble Beach Systems as the
broadcast industry adapts to the opportunities presented by the
expansion in audience and platforms, underpinned by strong
continuing growth in advertising revenues. Pebble Beach Systems is
now well-positioned to deliver solutions to the global broadcast
market as it invests in channel and content delivery infrastructure
and systems.
With significant improvements in our profitability and operating
cash generation over FY17, we go into 2019 with a strong order
backlog and will improve our financial position further as
broadcasters invest to take advantages of increasing audience
numbers and advertising spend."
- ends -
For further information please contact:
+44 (0) 75 55 59
John Varney, Non-Executive Chairman 36 02
Shaun Dobson / James White +44 (0) 20 74 96
N+1 Singer 30 00
The Company is quoted on the LSE AIM market (PEB.L). More
information can be found at www.pebbleplc.com.
About Pebble Beach Systems
Pebble Beach Systems is a world leader in automation, channel in
a box, integrated and virtualised playout technology, with scalable
products designed for highly efficient multichannel transmission as
well as complex news and sports television. Installed in more than
70 countries and with proven systems ranging from single up to over
150 channels in operation, Pebble Beach Systems offers open,
flexible systems, which encompass ingest and playout automation,
and complex file-based workflows. The company trades in the US as
Pebble Broadcast Systems.
Forward-looking statements
Certain statements in this announcement are forward-looking.
Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to be correct. Because
these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements. The Group undertakes no obligation to
update any forward-looking statements whether as a result of new
information, future events or otherwise. Nothing in this
announcement should be construed as a profit forecast.
CHAIRMAN'S STATEMENT
Introduction
We delivered a strong financial performance despite market
conditions throughout 2018 being challenging as broadcast customers
assessed how best to invest in the evolving technologies of IP and
cloud orientated infrastructures whilst maintaining their
significant historical investment into traditional proprietary
infrastructure.
The restructuring of Pebble Beach Systems is now complete and we
have a clear mission, focussed on growth and a cost base structured
to ensure ongoing profitability and cash generation.
Pebble Beach Systems' mission is to support broadcasters as they
adapt to compete with new entrants in the video media space by
providing solutions to support their transition from traditional
broadcast infrastructure to more flexible IP-based
technologies.
Financial Results
Order intake for the full year of GBP10.8 million is above the
previous year (2017: GBP10.5 million). This includes two
significant orders as announced in November 2018.
The first order was from PRO TV, the largest commercial
broadcaster in Romania, who chose Pebble Beach Systems' solutions
to upgrade its entire playout operations. The order value was
GBP1.0 million, and project commission started in November 2018
ready for an on air date in early 2019.
The second order was from tpc Switzerland AG, the foremost
broadcast service provider in Switzerland. This order, also with a
value of GBP1.0 million, is for a new, state of the art, IP-based
facility which is currently under construction in Zürich. The
contract was finalised in November 2018 and the new facility is
scheduled to open in the autumn of 2019.
As expected, revenue for 2018 of GBP9.2 million (2017: GBP10.3
million) was down on 2017 as a result of focussing on high margin
business. Despite the slightly reduced revenue, overall gross
margin grew in 2018 to GBP6.7 million (73%) (2017: GBP6.5 million
(63%)).
The improved margin, combined with reduced overheads resulting
from the restructure, has resulted in an Adjusted EBITDA of GBP2.5m
in 2018 (2017: GBP0.5 million) before non-recurring items,
depreciation and amortisation of GBP2.7 million are deducted.
Net finance costs were slightly reduced in 2018 reflecting the
Group's pay-down of some of its revolving credit facility ("RCF")
and overdraft being offset by a higher rate of 3.30% (2017: 2.40%).
The available RCF as at 31 December 2018 was brought down to
GBP10.7 million, all of which had been drawn fully down (2017:
GBP15.0 million, of which GBP11.5 million had been fully drawn
down). Interest paid on the RCF was GBP0.3 million (2017: GBP0.3
million).
Liquidity risk continued to be reduced, with combined secured
bank loans and trade and other payables being further reduced by
GBP1.0 million from GBP16.3 million in 2017 to GBP15.3 million at
the end of 2018.
The Company continues to view investment in the development of
new products and services as key to future growth. In 2018 Pebble
Beach Systems capitalised GBP0.7 million of development costs
(amortised GBP0.8 million), (2017: GBP0.8 million) (amortised
GBP0.7 million).
Going Concern
The directors are required to make an assessment of the
Company's and Group's ability to continue to trade as a going
concern.
At 31 December 2018 net debt was GBP9.4 million (2017: GBP10.2
million) comprising net cash of GBP1.3 million (2017 GBP1.3
million) and the drawn down RCF of GBP10.7 million (2017: GBP11.5
million).
We maintain a good relationship with our bank and on 27 March
2019 an extension of the current loan agreement was signed with our
bank. The revision secures the facility until 30 November 2020 with
banking covenants and a repayment schedule in place.
In order to assess the appropriateness of preparing the
financial statements on a going concern basis, management have
prepared detailed projections of expected cash flows. These
projections include the continued impact of cost reductions
implemented in 2017 and 2018, margin improvement strategies and
sales growth in 2019.
As part of the review, the Board considered sensitivities with
regards to the timing of revenue growth coming from the transition
in the broadcast industry from SDI to IP platforms. It looked at
sensitivities regarding the recovery of gross margin following the
completion of the Harmonic OEM. Finally, it considered
sensitivities regarding the cost reductions.
The Board have concluded that the Group will have sufficient
resources to meet its liabilities for the foreseeable future and
therefore the Group and hence the Company remains a going
concern.
XG Technology Inc.
In December 2018 the Board were pleased to report that following
negotiations a resolution was reached with XG Technology Inc.
("XG") which concludes the ongoing dispute, last reported in our
2018 half year results. As a result the formal process to recover
sums from XG was concluded and a mutual release signed to ensure no
further liabilities are due by either party.
Board changes
Two appointments were made to the Board during 2018.
As previously announced, Peter Mayhead was appointed as Group
CEO on 1 January 2018 and Graham Pitman was appointed to the Board
as Non-Executive Director on 6 April 2018.
Trading Outlook
With significant improvements in our profitability and operating
cash generation over FY17, as we go into 2019, we will improve our
financial position further as broadcasters invest to take
advantages of increasing audience numbers and advertising
spend.
John Varney
Non-Executive Chairman's Statement
For the year ended 31 December 2018
FINANCIAL REVIEW
Divisions and Markets
For the year ended 31 December 2018
Continuing Operations
2018 2017 Change
GBP'm GBP'm %
----------------------- ------- ------- -------
Pebble Beach Systems 9.2 10.3 -11.1%
-------
Total Revenue 9.2 10.3 -11.1%
----------------------- ------- ------- -------
Pebble Beach Systems 2.9 1.8 61.8%
Central (0.4) (1.3) -72.1%
----------------------- ------- ------- -------
Total adjusted EBITDA 2.5 0.5 394.0%
----------------------- ------- ------- -------
Pebble Beach Systems has contributed GBP9.2 million of revenues
and GBP2.9 million of adjusted EBITDA in 2018. Non-recurring items
excluded from adjusted profit are GBP0.3 million (2017: GBP0.5
million) charge in respect of rationalisation and redundancy
costs.
Discontinued Operations
2018 2017 Change
GBP'm GBP'm %
--------------------------------------------------- ------- ------- --------
Vislink Communication Systems - 1.0 -100.0%
--------
Total Revenue - 1.0 -100.0%
--------------------------------------------------- ------- ------- --------
Profit/(loss) attributable to equity shareholders 0.2 2.9 -93.3%
--------------------------------------------------- ------- ------- --------
The profit attributable to equity shareholders for discontinued
operations was GBP0.2 million.
Goodwill impairment
In accordance with the requirements of IAS 36 'Impairment of
assets', goodwill is required to be tested for impairment on an
annual basis, with reference to the value of the cash-generating
units ("CGU") in question. The carrying value of goodwill at 31
December 2018 is GBP3.2 million (2017: GBP3.2 million) and relates
solely to Pebble Beach Systems. There is significant headroom
between the carrying value and the value of the forecast discounted
cash flows.
Non-recurring items
The Group charged GBP0.3 million (2017: GBP0.5 million) of
non-recurring costs to the consolidated income statement in respect
of rationalisation and redundancy costs.
Cash flows
The Group held cash and cash equivalents of GBP1.3 million at 31
December 2018 (2017: GBP1.2 million). The table below summarises
the cash flows for the year.
GBP'million 2018 2017
------------------------------------------- ------ --------------
Cash generated from/(used in) operating
activities 1.7 (2.6)
Net cash (used in)/generated from
investing activities (0.8) 7.1
Net cash (used in) financing activities (0.8) (3.5)
Effects of foreign exchange - (0.3)
------------------------------------------- ------ --------------
Net increase in cash and cash equivalents 0.1 0.7
Cash and cash equivalents at 1 January 1.2 0.5
------------------------------------------- ------ --------------
Cash and cash equivalents at 31 December 1.3 1.2
------------------------------------------- ------ --------------
As at 31 December 2018 net debt was GBP9.4 million (cash GBP1.3
million and bank debt of GBP10.7 million). At the end of January
2019, net debt had reduced to GBP9.2 million. The Group was using
GBP10.7 million of its available facilities in December 2018.
Foreign exchange
The principal exchange rates used by the Group in translating
overseas profits and net assets into sterling are set out in the
table below.
Average Average Year end Year end
rate rate rate rate
Rate compared to GBP sterling 2018 2017 2018 2017
------------------------------ ------- ------- -------- --------
US dollar 1.335 1.289 1.277 1.351
------------------------------ ------- ------- -------- --------
Risk management
The Board regularly reviews the full range of business risks
facing the Group. The approach adopted is to identify, evaluate and
manage the likely impact of risk on the Group's business
objectives. Where the risks are unavoidable they are managed
through business controls and where appropriate through insurance
and treasury activities.
The Group has a programme of regular risk assessment, which
incorporates internal control reviews of both a financial and
non-financial nature. A process of continuous review has been in
place throughout the year at an operating company level to consider
the risk environment and the effectiveness of controls. The results
of reviews, initiatives and progress on implementing control
improvements are regularly reported to the Board.
CONSOLIDATED GROUP INCOME STATEMENT
for the year ended 31 December 2018
2018 2017
Notes GBP'000 GBP'000
Revenue 3 9,174 10,320
Cost of sales (2,515) (3,831)
-------- --------
Gross profit 6,659 6,489
Sales and marketing expenses (2,163) (2,351)
Research and development expenses (1,222) (1,762)
Administrative expenses (1,759) (2,718)
Foreign exchange gain/(loss) 28 (95)
Other expenses (1,723) (1,931)
Operating loss 4 (180) (2,368)
--------------------------------------------- ------ -------- --------
Operating loss is analysed as:
Adjusted earnings before interest, tax,
depreciation and amortisation 2,470 500
Non-recurring items 3,4 (304) (512)
Exchange gains/(losses) credited/(charged)
to the income statement 28 (95)
--------------------------------------------- ------ -------- --------
Earnings before interest, tax, depreciation
and amortisation (EBITDA) 2,194 (107)
--------------------------------------------- ------ -------- --------
Depreciation (127) (187)
Amortisation and impairment of acquired
intangibles (1,419) (1,419)
Amortisation of capitalised development
costs (828) (655)
Finance costs 5 (296) (339)
Finance income 5 4 4
Loss before tax (472) (2,703)
Tax 6 253 95
-------- --------
Loss for the year being loss attributable
to owners of the parent (219) (2,608)
Net result from discontinued operations 195 2,892
-------- --------
Net result for the year (24) 284
Earnings per share from continuing and
discontinued operations attributable to
the owners of
the parent during the year
Basic (loss)/earnings per share
From continuing operations 8 (0.2)p (2.1)p
From discontinuing operations 0.2p 2.3p
-------- --------
From loss for the year 0.0p 0.2p
--------------------------------------------- ------ -------- --------
Diluted (loss)/earnings per share
From continuing operations 8 (0.2)p (2.1)p
From discontinued operations 0.2p 2.3p
-------- --------
From loss for the year 0.0p 0.2p
--------------------------------------------- ------ -------- --------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
---------------------------------------------- -------- --------
(Loss)/Profit for the financial year (24) 284
Other comprehensive income - items that
may be reclassified subsequently to profit
or loss:
Exchange differences on translation of
overseas operations
- continuing operations (58) (92)
- discontinued operations 2 (176)
Recycle translation reserve for discontinued
operations - (5,077)
Total loss for the year attributable to
owners of the parent (80) (5,061)
----------------------------------------------- -------- --------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the year ended 31 December 2018
Capital
Ordinary Share redemption Merger Translation Accumulated
shares premium reserve reserve reserve losses Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 1 January 2017 3,115 6,800 617 32,448 5,206 (49,218) (1,032)
Share based payments:
Value of employee services - - - - - 28 1,247
Transaction with owners - - - - - 28 28
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Retained profit for the year - - - - - 284 284
Transfer - - - (2,670) - 2,670 -
Recycle translation reserve
for discontinued operations - - - - (5,077) - (5,077)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Exchange differences on translation
of overseas operations - - - - (268) - (268)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Total comprehensive income/expense
for the period - - - (2,670) (5,345) 2,982 (5,033)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 31 December 2017 3,115 6,800 617 29,778 (139) (46,236) (6,065)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 1 January 2018 3,115 6,800 617 29,778 (139) (46,236) (6,065)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Retained loss for the year - - - - - (24) (24)
Exchange differences on translation
of overseas operations - - - - (56) - (56)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Total comprehensive income/expense
for the period - - - - (56) (24) (80)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 31 December 2018 3,115 6,800 617 29,778 (195) (46,260) (6,145)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION
as at 31 December 2018
2018 2017
Notes GBP'000 GBP'000
----------------------------------------------- ------ -------- ---------
Assets
Non-current assets
Intangible assets 5,422 6,941
Property, plant and equipment 232 285
Deferred tax assets 3 -
-------- ---------
5,657 7,226
-------- ---------
Current assets
Inventories 210 225
Trade and other receivables 2,391 3,729
Current tax assets 12 5
Cash and cash equivalents 1,269 1,862
-------- ---------
3,882 5,821
Liabilities
Current liabilities
Financial liabilities - borrowings 1,100 1,613
Trade and other payables 4,287 5,588
Current tax liabilities - -
Provisions for other liabilities and charges 367 400
-------- ---------
5,754 7,601
-------- ---------
Net current (liabilities) (1,872) (1,780)
-------- ---------
Non-current liabilities
Financial liabilities - borrowings 9,550 10,500
Deferred tax liabilities 380 644
Provisions for other liabilities and charges - 367
-------- ---------
9,930 11,511
-------- ---------
Net assets (6,145) (6,065)
----------------------------------------------- ------ -------- ---------
Equity attributable to owners of the parent
Ordinary shares 10 3,115 3,115
Share premium account 10 6,800 6,800
Capital redemption reserve 10 617 617
Merger reserve 29,778 29,778
Translation reserve (195) (139)
Retained earnings 46,260 (46,236)
-------- ---------
Total equity (6,145) (6,065)
----------------------------------------------- ------ -------- ---------
CONSOLIDATED GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2018
2018 2017
Notes GBP'000 GBP'000
--------------------------------------------- ------ --------- ---------
Cash flows from operating activities
Cash generated from operations 9 2,039 (2,761)
Interest paid (295) (348)
Taxation (paid)/received (25) 528
--------- ---------
Net cash from operating activities 1,719 (2,581)
--------- ---------
Cash flows from investing activities
Interest received 4 47
Proceeds from sale of property, plant and
equipment 3 510
Proceeds from sale of intangibles - 7,493
Purchase of property, plant and equipment (88) (107)
Expenditure on capitalised development
costs (728) (798)
Net cash generated from/(used in) investing
activities (809) 7,145
--------- ---------
Cash flows from financing activities
Net cash used in repayment of financing
activities 11 (850) (3,500)
Net cash used in financing activities (850) (3,500)
--------- ---------
Net increase in cash and cash equivalents
and overdrafts 60 1,064
Effect of foreign exchange rate changes 11 (40) (272)
--------- ---------
Cash and cash equivalents and overdrafts
at 1 January 1,249 457
Cash and cash equivalents and overdrafts
at 31 December 1,269 1,249
--------- ---------
Net debt comprises:
Cash and cash equivalents and overdrafts 1,269 1,249
Borrowings (10,650) (11,500)
--------- ---------
Net debt at 31 December 11 (9,381) (10,251)
--------------------------------------------- ------ --------- ---------
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2018
1. GENERAL INFORMATION
The Pebble Beach Systems Group is a leading global software
business specialising in solutions for playout automation, and
content serving customers in the broadcast markets.
The Company is a public limited company and is quoted on the
Alternative Investment Market (AIM) of the London stock exchange.
The Company is incorporated and domiciled in the UK. The address of
its registered office is 12 Horizon Business Village, 1 Brooklands
Road, Weybridge, Surrey, KT13 0TJ.
The registered number of the Company is 04082188.
This final results announcement was approved for issue at close
of business on 27 March 2019.
2. BASIS OF PREPARATION
The Group financial statements have been prepared on a going
concern basis in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRS), IFRIC
interpretations and the Company Act 2006 applicable to companies
reporting under IFRS.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise judgment in the process of applying
the Group's accounting policies. The areas involving a higher
degree of judgment or complexity, or areas where assumptions and
estimates are significant to the Group financial statements are
disclosed in note 4 of the Group financial statements.
During the current reporting period IFRS 9 Financial Instruments
and IFRS 15 Revenue from Contracts with Customers became effective.
IFRS 9 did not impact the net assets of the Group. IFRS 15 has not
had a material impact on the net assets of the Group and the
revenue for 2017 has not been re-stated. In addition, standards or
amendments issued but not yet effective are not expected to have a
material impact on the net assets of the Group.
The financial information contained in these condensed financial
statements does not constitute the Company's statutory accounts
within the meaning of the Companies Act 2006. Statutory accounts
for the years ended 31 December 2018 and 31 December 2017 have been
reported on, without qualification or drawing attention to any
matters by way of emphasis, by the Company's auditor and do not
contain a statement under s.498 (2) or s.498 (3) of the Companies
Act 2006. Whilst the financial information included in this Annual
Financial Report Announcement has been computed in accordance with
International Financial Reporting Standards ("IFRS"), this
announcement, due to its condensed nature, does not itself contain
sufficient information to comply with IFRS.
In order to comply with the regulatory requirement to include
un-edited text in this Annual Financial Report Announcement, page
and note references refer to page and note numbers in the Annual
Financial Report 2018.
The statutory accounts for the year ended 31 December 2018,
prepared under IFRS, will be delivered to the Registrar in due
course. The Group's principal accounting policies as set out in the
2018 statutory accounts have been applied consistently in all
material respects.
GOING CONCERN
The directors are required to make an assessment of the Company
and Group's ability to continue to trade as a going concern.
At 31 December 2018 net debt was GBP9.4 million (2017: GBP10.2
million) comprising net cash of GBP1.3 million (2017 GBP1.3
million) and bank debt of GBP10.7 million (2017: GBP11.5
million).
We maintain a good relationship with our bank and on 27 March
2019 an extension of the current loan agreement was signed with our
bank. The revision secures the facility until 30 November 2020 with
banking covenants and a repayment schedule in place.
In order to assess the appropriateness of preparing the
financial statements on a going concern basis, management have
prepared detailed projections of expected cash flows. These
projections include the continued impact of cost reductions
implemented in 2017 and 2018, margin improvement strategies and
sales growth in 2019.
As part of the review, the Board considered sensitivities with
regards to the timing of revenue growth coming from the transition
in the broadcast industry from SDI to IP platforms. It looked at
sensitivities regarding the recovery of gross margin following the
completion of the Harmonic OEM. Finally, it considered
sensitivities regarding the cost reductions.
The Board have concluded that the primary risk is one of ongoing
trading and therefore the Group and hence the Company remains a
going concern.
3. SEGMENTAL REPORTING
The Group's internal organisational and management structure and
its system of internal financial reporting to the Board of
Directors comprise of Pebble Beach Systems Limited and Central
costs. The chief operating decision-maker has been identified as
the Board.
The Board reviews the Group's internal financial reporting in
order to assess performance and allocate resources. Management have
therefore determined that the operating segments for the Group will
be based on these reports.
The Pebble Beach Systems Limited business is responsible for the
sales and marketing of all Group software products and
services.
The table below shows the analysis of Group external revenue and
operating profit from continuing operations by business
segment.
Pebble Central Total
Beach Systems GBP'000
----------------------------------------------- --------------- -------- ---------
Year to 31 December 2018
Broadcast 9,174 - 9,174
Total revenue 9,174 - 9,174
--------------- -------- ---------
Adjusted EBITDA 2,867 (397) 2,470
Depreciation (127) - (127)
Amortisation of acquired intangibles (1,419) - (1,419)
Amortisation of capitalised development
costs (828) - (828)
Non-recurring items (3,858) 3,554 (304)
Exchange (losses)/gains 46 (18) 28
Finance costs - (296) (296)
Finance income 3 1 4
Intercompany finance income/(costs) 118 (118) -
(Loss)/profit before taxation (3,198) 2,726 (472)
Taxation 254 (1) 253
Profit/(loss) for the year being attributable
to owners of the parent (2,994) 2,725 (219)
Year to 31 December 2017
Broadcast 10,320 - 10,320
Total revenue 10,320 - 10,320
--------------- -------- ---------
Adjusted EBITDA 1,772 (1,272) 500
Depreciation (157) (30) (187)
Amortisation of acquired intangibles (1,419) - (1,419)
Amortisation of capitalised development
costs (655) - (655)
Non-recurring items (113) (399) (512)
Exchange (losses)/gains (95) - (95)
Finance costs - (339) (339)
Finance income 3 1 4
Intercompany finance income/(costs) 70 (70) -
Profit/(loss) before taxation (594) (2,109) (2,703)
Taxation 511 (416) 95
Loss for the year being attributable
to owners of the parent (83) (2,525) (2,608)
----------------------------------------------- --------------- -------- ---------
Geographic external revenue analysis
The revenue analysis in the table below is based on the
geographical location of the customer for continuing operations of
the business.
2018 2017
Total Total
GBP'000 GBP'000
---------------- ---------- ----------
By market
UK & Europe 4,820 4,655
North America 585 1,772
Latin America 513 357
Middle East
and Africa 2,931 2,811
Asia / Pacific 325 725
9,174 10,320
---------------- ---------- ----------
Net assets
The table below summarises the net assets of the Group by
division. Balance sheet reporting is disclosed by the divisional
assets and liabilities of the Group as this is consistent with the
presentation of internal information provided to the Executive
Management Board and the Board of Directors.
2018 2017
GBP'000 GBP'000
---------------------- --------- ---------
By division:
Pebble Beach Systems 5,308 8,104
Central (11,453) (14,169)
(6,145) (6,065)
---------------------- --------- ---------
4. OPERATING LOSS
The following items have been included in arriving at the
operating loss for the continuing business:
2018 2017
GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------
Depreciation of property, plant and equipment 127 187
Amortisation of acquired intangibles 1,419 1,419
Operating lease rentals 167 167
Exchange (gains)/ losses (credited)/charged
to profit and loss (28) 95
Research and development expenditure expensed
in the year which includes: 1,222 1,762
* Amortisation of capitalised development costs 828 655
--------------------------------------------------------- ---------- ---------
Non-recurring items
The following items are excluded from management's assessment of
profit because by their nature they could distort the Group's underlying
quality of earnings. They are excluded to reflect performance in
a consistent manner and are in line with how the business is managed
and measured on a day-to-day basis:
2018 2017
GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------
Rationalisation and Redundancy costs 358 362
Provision for former executive debt (54) 260
Gain on sale of head office - (110)
304 512
--------------------------------------------------------- ---------- ---------
5. FINANCE COSTS - NET
2018 2017
GBP'000 GBP'000
--------------------- ---------- ----------
Finance costs (296) (339)
Finance income 4 4
Finance costs - net (292) (335)
--------------------- ---------- ----------
Finance costs represent interest payable on bank borrowings.
Finance income is derived from cash held on deposit.
6. INCOME TAX EXPENSE
2018 2017
GBP'000 GBP'000
--------------------------------------- --------- ---------
Current tax
UK corporation tax 27 -
Adjustments in respect of prior years (11) 169
--------------------------------------- --------- ---------
Total current tax 16 169
--------------------------------------- --------- ---------
Deferred tax
UK corporation tax (269) (267)
Adjustments in respect of prior years - 3
--------------------------------------- --------- ---------
Total deferred tax (269) (264)
--------------------------------------- --------- ---------
Total taxation (253) (95)
--------------------------------------- --------- ---------
The UK corporation tax rate decreased from 20 per cent to 19 per
cent from 1 April 2017. Changes to the UK corporation tax rates
were substantively enacted on 7 September 2016. These include
reductions to the main rate to reduce the rate to 17 per cent from
1 April 2020.
Deferred tax has been provided for at the rate of 17 per cent
(2017: 17 per cent).
7. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
For diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The dilutive shares are those
share options granted to employees where the exercise price is less
than the average market price of the company's ordinary shares
during the year.
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below.
2018 2017
Weighted Weighted
average Earnings average Earnings
number per number per
Earnings of shares share Earnings of shares share
GBP000 000s pence GBP000 000s pence
--------------------------------- --------- ------------ ---------- --------- ------------ ----------
Basic and diluted loss
per share
Loss attributable to
continuing operations (219) (0.2)p (2,608) (2.1)p
Profit/(loss) attributable
to discontinued operations 195 0.2p 2,892 2.3p
--------------------------------- --------- ------------ ---------- --------- ------------ ----------
Basic and diluted profit/(loss)
per share (24) 124,477 0.0p 284 124,292 0.2p
--------------------------------- --------- ------------ ---------- --------- ------------ ----------
Potential ordinary shares are non-dilutive in the current and
prior years as they would decrease the loss per share from
continuing operations. Accordingly, there is no difference between
basic and diluted EPS.
Adjusted earnings
The directors believe that adjusted EBITDA, adjusted profit
before tax, adjusted earnings and adjusted earnings per share
provide additional useful information on underlying trends to
shareholders. These measures are used by management for internal
performance analysis and incentive compensation arrangements. The
term "adjusted" is not a defined term used under IFRS and may not
therefore be comparable with similarly titled profit measurements
reported by other companies. The principal adjustments are made in
respect of the amortisation of acquired intangibles and capitalised
development costs, non-recurring items and exchange gains or losses
charged to the income statement and their related tax effects.
The reconciliation between reported and underlying earnings and
basic earnings per share is shown below:
2018 2017
----------------------------------------- ----------------- ----------------
Earnings Earnings
GBP'000 GBP'000
Pence Pence
Reported loss per share - continuing
operations (219) (0.2)p (2,608) (2.1)p
Depreciation 105 0.1p 155 0.1p
Amortisation of acquired intangibles
after tax 1,178 0.9p 1,178 1.0p
Amortisation of capitalised development
costs 687 0.6p 544 0.4p
Non-recurring items after tax 245 0.2p 413 0.3p
Exchange losses/(gains) (23) 0.0p 77 0.1p
Adjusted (loss)/earnings per share
- continuing operations 1,973 1.6p (241) (0.2)p
----------------------------------------- ------ --------- -------- ---------
8. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of loss before taxation to net cash flows from
operating activities.
2018 2017
GBP'000 GBP'000
----------------------------------------------------- --------- ---------
Loss before tax - continuing operations (472) (2,703)
Loss before tax - discontinued operations 184 (2,847)
----------------------------------------------------- --------- ---------
Total loss before tax (288) (5,550)
Depreciation of property, plant and equipment 127 187
(Loss)/(Profit) on disposal of property, plant
and equipment 10 (110)
Loss on disposal of VCS - 1,335
Amortisation and impairment of development costs 828 856
Amortisation and impairment of acquired intangibles 1,419 1,418
Share-based payment expense - 28
Finance income (4) (47)
Finance costs 295 348
Decrease/(increase) in inventories 15 (19)
Decrease in trade and other receivables 848 2,489
Decrease in trade and other payables (811) (3,345)
Decrease in provisions (400) (351)
----------------------------------------------------- --------- ---------
Net cash generated from operating activities 2,039 (2,761)
----------------------------------------------------- --------- ---------
9. CALLED UP SHARE CAPITAL, SHARE PREMIUM AND CAPITAL REDEMPTION RESERVE
Number of Share Share Premium Capital Total
shares Capital redemption
GBP'000 reserve
'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- --------- -------------- ------------ ---------
At 1 January 2018 124,603 3,115 6,800 617 10,532
Share issues - - - - -
At 31 December 2018 124,603 3,115 6,800 617 10,532
--------------------- ---------- --------- -------------- ------------ ---------
10. NET FUNDS
Reconciliation of decrease in cash and cash equivalents to
movement in net cash:
Net cash and Other Total
cash equivalents borrowings net cash
GBP'000 GBP'000 GBP'000
------------------------------------------ ------------------ ------------ ----------
At 1 January 2018 1,249 (11,500) (10,251)
Cash flow for the year before financing 910 - 910
Movement in borrowings in the year (850) 850 -
Exchange rate adjustments (40) - (40)
Cash and cash equivalents at 31 December
2018 1,269 (10,650) (9,381)
------------------------------------------ ------------------ ------------ ----------
11. POST BALANCE SHEET EVENTS
On 27 March 2019 an extension of the current loan agreement was
signed with our bank. The revision secures the facility until 30
November 2020 with banking covenants and a repayment schedule in
place.
Ends
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SELEEWFUSESD
(END) Dow Jones Newswires
March 28, 2019 03:02 ET (07:02 GMT)
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