TIDMINX
RNS Number : 5688V
i-nexus Global PLC
04 December 2019
4 December 2019
i-nexus Global plc
("i-nexus", the "Company" or the "Group")
Preliminary Results
i-nexus Global plc (AIM: INX), a provider of cloud-based
Strategy Execution software solutions designed for the Global 5000,
is pleased to provide its preliminary results for the year ended 30
September 2019.
Financial Highlights
-- Group Revenue of GBP4.8m (2018: GBP4.7m)
-- Loss before tax of GBP4.3m (2018: GBP1.0m)
-- Adjusted EBITDA Loss for the financial year of GBP4.1m (2018: Loss* GBP0.6m)
-- Cash & cash equivalents as at 30 September 2019: GBP1.5m (30 September 2018 of GBP6.9m)
Operational Highlights
-- Encouraging increase in upsells and cross sells to existing
clients, delivering over GBP35k of additional Monthly Recurring
Revenue (MRR) (FY18: GBP10k)
-- Significant enhancements to product capabilities, including
the launch of two additional products into an early adopter
program; Pulse and Advisor, designed to reduce the complexity of
data entry and improving strategic insight immediately improving
customers' ROI
-- Positive progress with our partner programme with focused
discussions with several leading strategy consulting organisations
joining the programme
Post year end
-- Approximately GBP20k of additional MRR secured with existing
accounts since the start of the current financial year. Continuing
the trend seen in FY19 and helping to offset slow new deal
conversion.
*After adjusting for the non-recurring administrative expenses
of (GBP0.11m) in 2019 and (GBP0.18m) and share based payment
expense (GBP0.03m) in 2018
Simon Crowther, Chief Executive, of i-nexus Global plc,
commented: "While we did not achieve the level of overall revenue
growth we had expected in reported period, the new financial year
has started satisfactorily. Despite slower than expected
progression, we have a stronger platform from which to grow, having
created many exciting developments in our product, extended the
reach within our existing accounts, improved partner channel
relationships and have received great feedback from new and
exciting customers.
We are operating in an attractive, global market, with a wide
scope of application for the Group's proven technology, and in
which the Group is well placed.
With a clear growth strategy, strong leadership, careful cash
management, good governance and a significantly modernised product
suite, i-nexus is well positioned to build on our progress to
date."
For further information please contact:
i-nexus Global N+1 Singer (Nominated Adviser Alma PR
plc and Broker)
Via: Alma PR Tel: +44 (0)207 496 3000 Tel: +44 (0)203 405
0205
Simon Crowther, Lauren Kettle (Corporate Finance) Caroline Forde
CEO Tom Salvesen (Corporate Broking) Josh Royston
Alyson Levett,
CFO
About i-nexus Group plc
i-nexus supports some of the largest global companies in
running, improving and changing their businesses through the
provision of a scalable, enterprise-grade, cloud-based Continuous
Improvement ("CI") and Strategy Execution ("SE") software platform.
The platform is in use at global blue-chip businesses,
predominantly based across the US and Europe, helping customers
execute key strategic goals throughout all levels and divisions of
their organisations.
The Group's software supports Hoshin Kanri, a strategy
development methodology first introduced in the 1960s in Japan and
born out of lean, six sigma and operational improvement theory.
Hoshin Kanri (directly translated as "direction execution") is a
systematic planning, implementation and review methodology which,
when implemented, aims to ensure that the strategic goals of a
company are properly communicated to all employees and that they
drive progress and action at every level of the business.
i-nexus is headquartered in Coventry, UK with a sales office in
New York, and employs over 90 staff.
Chairman's Statement
This is our first full year as a plc after our IPO in June 2018
and whilst recognising that in certain respects it has been a
challenging year, with new client conversion being slower than
anticipated, the team have focused on developing our product range
in order to broaden our applicability to clients. I am pleased that
the team continue to rise to the challenge of building an
international enterprise SaaS business. Many aspects of the
business have been transformed from a year ago.
The Company remains focused on developing, delivering and
implementing cloud-based Operational Excellence (OE) and Strategic
Execution (SE) software as a service ("SaaS") solutions to
digitalise our customers' enterprise programmes. Our customers are
typically Global 5000 companies running large, complex OE and SE
programmes; it is within this setting that our technology platform
has the greatest applicability and where it can add most value.
Despite our relative size and stage of development, we count a
growing number of large, well established enterprises as customers,
which are increasingly using i-nexus at the core of their business
processes.
As a Board, at IPO we defined three crucial areas of business
development to take the business to the next stage, being:
-- Enhance the Company's go to market capabilities
-- Develop our products capabilities
-- Scale the Company's partner programme
The Group has invested significantly in all areas, but the
substantial investment made in our go to market teams has not yet
delivered the returns we had expected. However, we remain confident
that our differentiated and enhanced technology offering, growing
applicability and evolving customer relationships leave us well
positioned for the future.
The Group has also invested heavily in our Customer Success
teams in order to reduce churn and allow us to drive service and
upsell revenues. Whilst frustrating that client churn, in
particular at the start of the year, offset the progress made with
new customer wins and upsells, this investment has resulted in a
higher level of engagement with a greater number of prospects and
stronger relationships with our existing customer base.
The quality, functionality and evolution of our product is
critical to our ability to grow our applicability, retain and
expand with our current customers and attract new ones. New EVP of
Product, James Davies, has refocused our product strategy to meet
the needs of the three distinct sets of users of i-nexus. Details
of the advancements made will be covered in detail elsewhere in
this report, but as a Board we are excited about where this can
take us.
Part of our defined growth strategy is to efficiently expand our
market reach through growing our partnerships with specialist
consulting organisations. Pleasingly, we have seen a positive
response from several organisations wishing to use our platform to
replace the currently manual processes with a digital offering to
deploy within their corporate clients. Potential partners see this
as offering a competitive edge and embedding them more deeply with
the organisations they support. It is early days, but traction is
increasing and we expect to benefit from delivering lower-cost,
high-quality leads for i-nexus.
Notwithstanding the positive progress made, the Board recognises
that during this period, sales have fallen short of our
expectations. We expect good levels of cash inflows in Q2 from
recently secured customer renewals (in some cases also benefiting
from improved adoption), however it is vital that the business
focuses on tight cash management, as such this is an ongoing key
priority of Board and management discussions.
On behalf of the Board, I would like to thank all i-nexus staff
for the contribution they have made to the successful growth and
development of the Group in 2019 through their hard work and
collaboration.
In 2020, the Board and management of i-nexus Global plc are
focused on improving the execution of our go-to-market strategy and
continuing the progress made in 2019 on the other core strategic
areas of development identified above, while maintaining the
principle of careful cash management and sound governance.
Despite the challenging global headwinds, we look forward to the
next 12 months with cautious optimism. During tough economic times
large enterprises will focus unremittingly on being ever more
competitive and we believe Operational Excellence and Strategy
Execution are at the core of achieving these goals. For these
enterprises to successfully implement such programmes requires
automation and the i-nexus products offer a market leading solution
to this challenge.
I look forward to engaging further with shareholders at our AGM
in February.
CEO Statement
Though last year was a year of strategic progress across many
fronts, as a result of both internal and external factors, this
progress did not translate into the level of overall revenue growth
we had originally expected.
What we did see as encouraging, and testament to our strategic
focus on Customer Success, was a substantial increase in upsells
and cross sells to existing clients as our teams worked with
customers to unlock the full potential of i-nexus' SaaS solution.
This increase in upsells and cross sells and associated service
revenue has helped offset slower than expected new deal conversion
and the previously reported customer churn early in the year. The
benefits of our platform when deployed effectively within
method-mature clients is demonstrated by this increasing adoption
at our existing client base.
Our Growth Strategy
Strategy Execution is increasingly recognised as a fundamentally
important process at the core of every enterprise which only
becomes more complex and challenging to manage as the organisation
grows. i-nexus' mission is to be synonymous with Strategy
Execution; when organisations talk of delivering on their strategy,
they should see i-nexus as a preferred solution.
At i-nexus we have a well-developed Hoshin Kanri strategic plan,
which we have spent the past year executing on. This has been
essential for us to deploy growth capital appropriately and
carefully manage our own transformation.
The detail of the priorities we have had this year in terms of
delivering on these Strategic Objectives are extensive, however I
would like to pull out some key highlights that I think frame this
year's result.
During FY19 the Company invested significantly in its Sales and
Marketing capabilities. Despite this, our new business performance
in the year was below our expectations. This is clearly very
disappointing, but we remain encouraged and optimistic as to the
quality and the development of our pipeline of new customer
opportunities. As a result of the lessons learned in FY19, we are
constantly reviewing and refining our approach to new business
conversion. We believe that our ability to capitalise on the
increased quality and volume of opportunities, both within existing
and for new accounts, will improve as we implement further
enhancements to our go-to-market strategy.
Where we have seen a stronger return on our investment is our
reach within existing accounts. A strong team of Customer Success
Executives coupled with experienced new Account Executives have
made great inroads in both growing the recurring revenue from our
existing accounts and enhancing the visibility in and knowledge of
our existing accounts to help de-risk churn.
We now have 100% coverage across all of our customer accounts,
both in terms of regular senior level interaction and engagement.
The introduction of a market leading success tool means we now have
a live dashboard covering a variety of success measures to
understand the health of all our accounts. These two things ensure
that we really understand the health of a deployment both in terms
of driving increasing adoption but also the potential risks or
early warning signs that could lead to churn or a reduced renewal.
Whilst our success in embedding our solutions with customers and
driving reduction in churn will only truly be seen in this coming
year, we have seen improved adoption across our customer accounts
already.
This expanded reach within our customers and improved adoption
provides i-nexus with the opportunity to add incremental service
and recurring SaaS revenues. During FY19, we benefitted from both
upsells and cross sells within a number of our existing accounts,
delivering over GBP35k of additional Monthly Recurring Revenue
(MRR), comparing favourably to the previous year (FY18: GBP10k). We
are seeing a continuation of this trend so far in FY20.
Driving an innovative approach in Product development has also
been a strong focus this year in order to grow our applicability to
clients and verticals that we can target.
Following a strategic product review earlier this year, i-nexus
is pleased to announce that two new products, i-nexus Pulse and
i-nexus Advisor, have been made available to select customers as
beta products. The revised product suite now includes i-nexus
Workbench (historically the company's flagship solution) and the
two new products, i-nexus Pulse and i-nexus Advisor, both built on
a new cloud-native architecture and both designed as mobile-fast
applications supporting a range of different devices.
I-nexus Pulse targets the majority of i-nexus users who need to
quickly and easily enter updates to metrics and projects. i-nexus
Advisor, on the other hand, provides executives and strategy
leaders with real-time visibility through data visualisation into
the robustness of strategic plans, delivery of projects against
these plans, and the measurable value attributed to the projects
towards strategic objectives.
I-nexus Workbench remains focused on the needs of expert users
and practitioners. A major release of Workbench is planned for 1H
CY20, introducing a new user experience to match the modern
interface introduced in i-nexus Pulse and i-nexus Advisor
We have continued to develop relationships with potential
channel partners, which is a critical adjunct to our direct sales
capabilities. New partners are typically specialist operational
excellence and strategy execution consulting firms looking to
digitalise their current manual implementations. Across the sector,
partners have acknowledged the need for such digitalisation if
customers are to realise the true benefits of their operational
excellence and strategy execution programmes, also recognising that
manual implementation of complex, growing OE and SE programmes is
unsustainable. What is positive is that these consulting firms are
actively seeking us out, in search of a digital solution to offer
their customers to differentiate them within their competitive
landscape. This was a significant change in FY19 that we are
looking to capitalise on. The challenge is to persuade partners and
customers to move from predominantly in-house developed solutions.
Although early days, these relationships are leading to
opportunities for i-nexus with mature operational excellence and
strategy execution customers who recognise the challenges of
in-house implementation platforms.
Our people
Our people are pivotal in driving us forwards and delivering on
our goals. We have invested substantially in new employees this
year to support our core strategies and to build out the structures
and departments needed by i-nexus going forward. Our employee
numbers have increased from 62 at the end of FY18 to 94 as at 30
September 2019. This growth has been tempered in the light of our
rate of sales delivery; and the Board has always and continues to
consider it key to maintain a careful, balanced approach to growing
the business and prudent cash management.
Looking ahead
I am excited about the future. While we did not achieve the
level of overall revenue growth we had expected in reported period,
the new financial year has started satisfactorily. Despite slower
than expected progression, we have a stronger platform from which
to grow, having created many exciting developments in our product,
extended the reach within our existing accounts, improved partner
channel relationships and have received great feedback from new and
exciting customers.
We are operating in an attractive, global market, with a wide
scope of application for the Group's proven technology, and in
which the Group is well placed.
With a clear growth strategy, strong leadership, careful cash
management, good governance and a significantly modernised product
suite, i-nexus is well positioned to build on our progress to
date
CFO's Report
Reported revenue
Revenue was flat at GBP4.8m (FY18: GBP4.7m) as both internal and
external factors adversely affected our rate of new deal
conversion. The Group signed 8 new customers (FY18: 10), all under
recurring contracts of at least one year in length, typically paid
annually in advance. Upsells and cross sells in our existing
accounts were substantially higher in FY19, having added GBP35k
Monthly Recurring Revenue ("MRR") (FY18: GBP10k). This is clearly
encouraging and demonstrates a good initial return on our
investments in Customer Success, however some exceptional and in
part unexpected customer churn largely outweighed this growth, and
we exited FY19 with closing MRR of GBP340k (FY18 exit MRR:
GBP335k).
Revenue from recurring contracted software subscriptions was
GBP4.0m (FY18: GBP4.0m) and from associated professional services
was GBP0.8m (FY18: GBP0.7m). After a sound start to the year in
terms of professional services billing, this also weakened in the
second half, due to the lack of new deals, giving us the
opportunity to invest resource in developing relationships with
potential Channel Partners and existing accounts.
Gross Margin
Gross margin in the year was GBP3.5m, or 74% (FY18: GBP3.3m, or
69%) after accounting for commission payable to the Group's
business partners. This improvement in margin demonstrates the
results of our investment program, as anticipated. Reported gross
margin is the combined gross margin over both recurring software
subscriptions and professional services.
Overheads
Overhead (de ned as the aggregate of staff costs, other
operating expenses but excluding those costs included in cost of
sale, depreciation of tangible assets and amortisation of
intangible assets, and share based payment charges) increased in
the year from GBP4.1m to GBP7.8m. We have managed our post IPO
investments in the light of weaker sales delivery to protect our
cash position and overall P&L result and savings to our
originally projected investment plan have been made without
jeopardising our overall strategy for future growth. Included in
these overheads was GBP0.1m of non-recurring administrative
expenses. Interest expense at GBP67k is down on the previous year
as debt has been repaid.
Capitalised development costs amounted to GBP0.6m in the year.
The additional development capacity is contributing to the Groups'
products marketability and the product enhancements made recently
are strategically important to us and our current customers and
prospects.
Group Loss before taxation rose from GBP1.0m in FY18 to GBP4.3m,
a result that reflects the rate of investments made. At this
critical stage in i-nexus growth, the investment has been necessary
to fuel our ambition to become the leading enterprise software
provider in the Strategy Execution market.
Cash Flow
The Group has cash & cash equivalents at the period end of
GBP1.5m (2018: GBP6.9m). Gross debt at 30 September was GBP0.4m of
which GBP0.2m was payable within one year.
The Group experienced a net out ow of funds from operating
activities of GBP4.2m (2018 GBP0.6m). The Group had a cash out ow
of GBP0.4m (2018 GBP1.5m) from the servicing of its debt nance.
The Group continues to apply treasury and foreign currency
exposure management policies to minimise both the cost of nance and
our exposure to foreign currency exchange rate uctuations.
Careful cash management will continue to be a priority focus for
management and the Board for the foreseeable future. We regularly
undertake scenario planning and create contingency plans
accordingly.
The Board's assessment in relation to going concern is included
in Note 2 of the financial information. The Group's principal risks
and uncertainties are set out in Note 8 of the financial
information.
Capital expenditure
The Group operates an asset light strategy and has low capital
requirements, therefore expenditure on tangible xed assets is low
at 5% of revenue (2018: 3.4%).
Consolidated statement of comprehensive income for the year
ended 30 September 2019
Year ended As restated
30 September Year ended
2019 30 September
GBP 2018
Notes GBP
Revenue 3 4,759,072 4,741,916
Cost of sales (1,212,175) (1,488,028)
Gross profit 3,546,897 3,253,887
Administrative expenses (7,817,864) (4,139,628)
Operating loss (4,270,966) (885,741)
Adjusted EBITDA 4 (4,050,689) (626,916)
--------------- ---------------
Depreciation and profit/loss on disposal (105,977) (53,737)
Share based payment expense - (30,000)
Non-underlying items (114,300) (175,088)
Finance income 6,904 1,847
Finance costs (66,838) (124,384)
Loss before taxation (4,330,901) (1,008,278)
Tax expense 401,164 186,957
Loss for the year (3,929,738) (821,321)
Other comprehensive income:
Exchange differences arising on translation
of foreign operations 163,438 (54)
Loss on net investment hedge (92,158) (28,529)
Total comprehensive loss for the year (3,858,458) (849,903)
--------------- ---------------
Attributable to equity holders of
company (3,858,458) (849,903)
--------------- ---------------
GBP GBP
--------------- ---------------
Basic and diluted loss per share 5 (0.13) (0.05)
--------------- ---------------
Consolidated statement of financial position as at 30 September
2019
ASSETS Notes 30 September As restated
2019 30 September
GBP 2018
GBP
Non-current assets
Intangible assets 618,609 55,011
Property, plant and equipment 339,131 199,222
Total non-current assets 957,740 254,233
-------------- --------------
Current assets
Trade and other receivables 1,418,293 1,751,956
Current tax receivable 400,000 183,162
Cash and cash equivalents 1,533,323 6,940,573
-------------- --------------
Total current assets 3,351,616 8,875,691
-------------- --------------
Total assets 4,309,356 9,129,924
-------------- --------------
LIABILITIES
Current liabilities
Borrowings 6 159,730 298,998
Trade and other payables 942,210 904,668
Deferred income 1,541,109 2,064,295
Total current liabilities 2,643,049 3,267,961
-------------- --------------
Non-current liabilities
Borrowings 243,500 403,230
Provisions 80,702 80,702
-------------- --------------
Total non-current liabilities 324,202 483,932
-------------- --------------
Total liabilities 2,967,251 3,751,893
-------------- --------------
Net assets 1,342,105 5,378,031
Equity
Share capital 7 2,957,161 2,957,161
Share premium 7,256,188 7,256,188
Capital redemption reserve - -
Share based payment reserve - -
Foreign exchange reserve (23,538) (9,508)
Merger reserve 10,653,881 10,653,881
Accumulated losses (19,501,587) (15,479,691)
-------------- --------------
Total equity 1,342,105 5,378,031
============== ==============
Consolidated statement of changes in equity for the year ended
30 September 2019
Issued Share Capital Share Foreign Merger Accumulated Total
capital premium redemption based exchange reserve losses equity
reserve payment reserve
reserve
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 October
2017 1,417,216 4,086,013 6,468,287 23,578 (9,454) - (14,307,385) (2,321,745)
Effective new
standards
adopted in
year
Effective - - - - - - (140,108) (140,108)
prior year
adjustments - - - - - - (235,929) (235,929)
As restated at
1 October
2017 1,417,216 4,086,013 6,468,287 23,578 (9,454) - (14,683,422) (2,697,782)
Loss for
period - - - - - - (821,318) (821,318)
Other
comprehensive
income - - - - (54) - (28,529) (28,583)
Transfer to
merger
reserve - (4,085,249) (6,468,287) - - 10,553,536 - -
Transfer to
losses - - - (53,578) - - 53,578 -
Issue of share
capital 1,539,945 8,461,426 - - - 100,345 - 10,101,716
Issue costs - (1,206,002) - - - - - (1,206,002)
Share based
payment
expense - - - 30,000 - - - 30,000
At 30
September
2018 2,957,161 7,256,188 - - (9,508) 10,653,881 (15,479,691) 5,378,031
Loss for the
year - - - - - - (3,929,738) (3,929,738)
Other
comprehensive
income - - - - (14,030) - (92,158) (106,188)
Share based - - - - - - - -
payments
At 30
September
2019 2,957,161 7,256,188 - - (23,538) 10,653,881 (19,501,587) 1,342,105
============ ============ ============ ========= ========== =========== =============== ==============
Consolidated Statement of cash flows for the year ending 30
September 2019
Group Group
Year ended Year ended
Notes 30 September 30 September
2019 2018
GBP GBP
Cash flows from operating activities
Loss before taxation (4,330,901) (1,008,275)
Adjustments for non-cash/non-operating
items:
Depreciation and profit on disposals 105,977 53,737
IPO Costs - 175,088
Share based payments - 30,000
Finance income (6,904) (1,847)
Finance charges 66,838 124,384
------------- -------------
(4,164,990) (626,390)
------------- -------------
Changes in working capital:
(Increase) in trade and other
receivables 216,825 (250,945)
(Decrease)/increase in trade
and other payables (485,645) (976,966)
Taxation 301,164 282,671
------------- -------------
Net cash from operating activities (4,224,804) (1,571,630)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and
equipment (245,886) (118,141)
Purchase of development costs (563,598) (55,011)
Interest received 6,904 1,847
------------- -------------
Net cash flow from investing
activities (802,580) (171,305)
------------- -------------
Cash flows from financing activities
Proceeds from shares - 9,982,508
Less issue costs - (1,381,090)
Proceeds from borrowings - 1,299,863
Repayment of borrowings (298,998) (1,338,486)
Interest paid (66,838) (124,384)
------------- -------------
Net cash flow from financing
activities (365,836) 8,438,411
------------- -------------
Net increase in cash and cash
equivalents (5,393,220) 6,694,953
------------- -------------
Cash and cash equivalents beginning
of period 6,940,573 245,674
Effect of foreign exchange rate
changes (14,030) (54)
------------- -------------
Cash and cash equivalents at
the end of the period 1,533,323 6,940,573
============= =============
1. General information
i-nexus Global PLC is a public company limited by shares
incorporated in England and Wales (registration number 11321642).
The registered office and principal place of business is i-nexus,
i-nexus Suite, George House, Herald Avenue, Coventry Business Park,
Coventry, CV5 6UB.
The principal activity of i-nexus Global plc and its
subsidiaries (the Group) is that of development and sale of
Enterprise cloud-based software on a software-as-a-service (SaaS)
basis and associated maintenance, support, software customisation
and professional consultancy services.
2. Significant accounting policies
The following principal accounting policies have been used
consistently in the preparation of consolidated financial
statements.
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union, in accordance with the IFRS Interpretations
Committee ("IFRIC") interpretations, and with those parts of the
Companies Act 2006 as applicable to companies reporting under IFRS.
The financial statements comply with IFRS as issued by the
International Accounting Standards Board (IASB).
The financial statements are prepared in sterling, which is the
presentational currency of the company. Monetary amounts in these
financial statements are rounded to the nearest GBP1.
Historical cost convention
The financial statements have been prepared under the historical
cost convention except for the following:
-- The business combination of i-Solutions Global Limited by
i-nexus Global plc is accounted for under the merger method
-- The use of fair value for financial instruments measured at fair value
Basis of consolidation
The financial statements incorporate the results of i-nexus
Global plc and all of its subsidiary undertakings as at 30
September 2019.
The accounting treatment in relation to the addition of i-nexus
Global plc as a new UK holding company of the Group fell outside
the scope of IFRS 3 'Business Combinations'. The share scheme
arrangement constituted a common control combination of the
entities. This was as a result of all the shareholders of i-nexus
Global plc being issued shares in the same proportion, and the
continuity of ultimate controlling parties. The Directors believe
that this approach presents fairly the financial performance,
financial position and cash flows of the Group.
Going concern
This historical financial information relating to i-nexus Global
plc has been prepared on the going concern basis.
The Group prepares regular business forecasts and monitors its
projected cash flows, which are reviewed by the Board. Forecasts
are adjusted for reasonable sensitivities that address the
principal risks and uncertainties to which the Group is exposed,
thus creating a number of different scenarios for the Board to
challenge. In those cases, where scenarios deplete the Group's cash
resources too rapidly, consideration is given to the potential
actions available to management to mitigate the impact of one or
more of these sensitivities, in particular the discretionary nature
of costs incurred by the Group, in order to ensure the continued
availability of funds. The Board have also taken into account that
the Group does not have access to bank debt and securing any
additional funding would rely on the future issue of shares or
access to non-bank debt.
On the basis of this analysis, after challenging and requiring
suitable variations be made to the scenarios presented, the Board
has concluded that there is a reasonable expectation that the Group
will have adequate resources to continue in operational existence
for the foreseeable future being a period of at least twelve months
from the balance sheet date.
Accordingly, the Group has continued to adopt the going concern
basis in preparing its financial statements for the year ended 30
September 2019.
Abridged financial information
The financial information in this announcement which was
approved by the Board of Directors does not constitute the
Company's statutory accounts for the year ended 30 September 2018.
This is the first set of accounts since incorporation of the
company on 20 April 2018.
This preliminary announcement has been prepared in accordance
with the accounting policies under IFRS as adopted by the EU.
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with IFRS, this
announcement does not itself contain sufficient information to
comply with IFRS. This preliminary announcement constitutes a
dissemination announcement in accordance with Section 6.3 of the
Disclosures and Transparency Rules (DTR).
3. Revenue and segmental reporting
The Group has one single business segment and therefore all
revenue is derived from the rendering of services as stated in the
principal activity. The group operates four geographical segments,
as set out below. This is 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, has been identified as the management team
comprising the executive directors who make strategic
decisions.
Year ended As restated
30 September Year ended
2019 30 September
GBP 2018
GBP
United Kingdom 928,733 805,941
Rest of Europe 1,624,195 1,927,849
United States 2,029,839 1,917,689
Rest of the World 176,305 90,437
--------------- --------------
4,759,072 4,741,916
=============== ==============
The Group has two main revenue streams in each of the years
presented, as detailed below:
Year ended As restated
30 September Year ended
2019 30 September
GBP 2018
GBP
Licence 4,027,129 4,033,811
Services 731,943 708,105
4,759,072 4,741,916
=============== ==============
4. Adjusted EBITDA
Year ended Year ended
30 September 30 September
2019 2018
GBP GBP
Operating loss (4,270,966) (885,738)
Add back:
Depreciation and profit/loss on disposal 105,977 53,737
Share based payment expense - 30,000
Non-underlying items 114,300 175,088
-------------- --------------
Adjusted EBITDA (4,050,689) (626,913)
============== ==============
5. Loss per share
The loss per share has been calculated using the loss for the
year and the weighted average number
of ordinary shares outstanding during the year, as follows:
Year ended Year ended
30 September 30 September
2019 2018
GBP GBP
Loss for the period attributable to equity
holders of the company (3,858,458) (849,806)
-------------- --------------
Weighted average number of ordinary shares 29,571,610 18,495,089
-------------- --------------
Loss per share (0.13) (0.05)
============== ==============
6. Borrowings
Group
At 30 September At 30 September
2019 2018
GBP GBP
Current
Venture debt 159.730 298,998
159,730 298,998
---------------- ----------------
Non-current
Venture debt 243,500 403,230
243,500 403,230
---------------- ----------------
Total borrowings 403,230 702,228
================ ================
Venture debt
The venture debt is secured by way of a fixed and floating
charges over the title of all assets held by i-Solutions Global
Limited. The venture debt has a fixed interest rate of the higher
of 11.5 per cent. per annum or LIBOR plus 8 per cent. per
annum.
The Group borrowings are repayable as follows:
At 30 September As restated
2019 At 30 September
GBP 2018
GBP
Within 1 year 159,730 298,998
Between 1 year and 2 years 179,098 159,730
Between 2 years and 5 years 64,402 243,500
403,230 702,228
================ =================
The directors consider the value of all financial liabilities to
be equivalent to their fair value.
7. Share capital
Group
At At
30 September 30 September
2019 2018
GBP GBP
Authorised, allotted, called
up and fully paid
29,571,605 Ordinary shares
of GBP0.10 each 2,957,161 2,957,161
2,957,161 2,957,161
============== ==============
Fully paid shares, which have a par value of GBP0.10, carry one
vote per share and carry rights to a dividend.
Reconciliation of movement in shares during the year
Group
Ordinary Ordinary
number number
GBP1 shares GBP0.10 shares
At 1 October 2017 1,417,216 10
Subdivision of shares (1,417,216) 14,172,160
Exercise of options - 2,186,920
Conversion of loan notes - 188,620
IPO share issue - 13,023,895
------------
At 30 September 2018 - 29,571,605
============ ===============
Company
At 30 September At 30 September
2019 2018
GBP GBP
Authorised, allotted, called up and
fully paid
29,571,605 Ordinary shares of GBP0.10
each 2,957,161 2,957,161
2,957,161 2,957,161
--------------------------------- ================
Fully paid shares, which have a par value of GBP0.10, carry one
vote per share and carry rights to a dividend.
The company issued no new shares in the year.
8. Principle risks and uncertainties
Although the directors seek to minimise the impact of risk
factors, the Group is subject to a number, of those most relevant
are as follows:
Customer churn
The Group has experienced falling revenues in relation to
certain customers in the past. The reasons for this are varied and
our historical ability to invest in our customers was limited. So
whilst the ramp up in investments is seeing benefits Customer churn
is still a risk for the Group and could affect the Group's trading
and financial position and prospects.
Failure of strategy execution market to grow at the rate
expected
The Directors believe that there is strong evidence supporting
the growth in the adoption of Strategy Execution software. However,
there can be no assurance that this growth will happen at the rate
envisaged by the Directors. If the market fails to adopt Strategy
Execution software at the rate envisaged then this will affect the
Group's future success and adversely affect its business, prospects
and results of operations and financial position.
The Group may face competition in a rapidly evolving market
The Group may face an increasing amount of competition in the
future as the market expands, making entry to it more attractive.
The entry into the market of strong, well-funded competitors,
including, but not limited to, in-house systems developed by either
internal IT departments or third-party consulting firms/system
integrators could have a negative impact on sales volumes or profit
margins achieved by the Company in the future.
Risks relating to growth plans
The Company's strategy depends upon market acceptance of its
solution to support its growth plans. There is a risk that if the
i-nexus solution is not accepted by the market as effectively as
the Board anticipate, the Company's investment in sales, marketing
and development of the i-nexus solution may exceed revenue growth,
which could likewise impact upon the Group's financial position and
prospects.
9. Forward-looking statements
This announcement may include certain forward-looking
statements, beliefs or opinions, including statements with respect
to the Group's business, financial condition and results of
operations. These forward-looking statements can be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology. These statements are made by the
Directors in good faith based on the information available to them
at the date of this announcement and reflect the Directors' beliefs
and expectations. By their nature these statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future. A number of
factors could cause actual results and developments to differ
materially from those expressed or implied by the forward-looking
statements, including, without limitation, developments in the
global economy, changes in government policies, spending and
procurement methodologies, and failure in health, safety or
environmental policies. No representation or warranty is made that
any of these statements or forecasts will come to pass or that any
forecast results will be achieved. Forward-looking statements speak
only as at the date of this
announcement and the Company and its advisers expressly disclaim
any obligations or undertaking to release any update of, or
revisions to, any forward-looking statements in this announcement.
No statement in the announcement is intended to be, or intended to
be construed as, a profit forecast or to be interpreted to mean
that earnings per share for the current or future financial years
will necessarily match or exceed the historical earnings. As a
result, you are cautioned not to place any undue reliance on such
forward-looking statements.
10. Availability of Report and Accounts
The audited report and accounts for the year ended 30 September
2019 will be published and posted to shareholders in due course.
Following publication a soft copy of the report and accounts will
also be available to download from the Company's website,
www.i-nexus.com.
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 GMMGZGFLGLZZ
(END) Dow Jones Newswires
December 04, 2019 02:00 ET (07:00 GMT)
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