TIDMINSE
RNS Number : 3479Y
Inspired PLC
06 September 2022
6 September 2022
Inspired PLC
("Inspired" or the "Group")
Results for the six months ended 30 June 2022
Inspired (AIM: INSE), a leading technology enabled service
provider supporting businesses in their drive to reduce energy
consumption, deliver net-zero, control energy costs and manage
their response to climate change, announces its consolidated,
unaudited half year results for the six-month period ended 30 June
2022.
Financial Results
H1 2022 H1 2021 % change
Revenue GBP40.45m GBP32.62m 24%
Gross profit GBP26.81m GBP24.09m 11%
Adjusted EBITDA** GBP9.67m GBP8.82m 10%
Adjusted profit before tax*** GBP6.47m GBP6.00m 8%
Underlying cash generated from
operations*** GBP5.77m GBP1.08m 434%
Profit before tax GBP2.43m GBP0.94m 159%
Adjusted Diluted EPS**** 0.55p 0.53p 4%
Diluted Basic EPS 0.18p 0.07p 157%
Net Debt GBP42.94m GBP30.17m -42%
Interim dividend per share 0.13p 0.12p 8%
Highlights
-- H1 performance was in line with Board expectations against an
unprecedented backdrop in UK energy markets
-- The Group delivered revenue growth on prior year of 24% in
H1, with 3% growth organically in Energy Assurance and 49% organic
growth in Energy Optimisation
-- Adjusted EBITDA grew by GBP0.9m (10%) in H1, with Energy
Assurance margins maintained; the mix of Energy Optimisation
revenues resulted in Group EBITDA margin reducing to 24% (H1 2021:
27%)
-- The Group order book remained consistent with levels seen at
the end of 2021 being GBP67.5m at 30 June 2022. The order book is
measured in terms of total contract value which, when energy prices
are high can be reduced by the timing and duration of renewals of
Energy Assurance services
-- Underlying cash generation from operations of GBP5.8m
represented a significant improvement over the prior year as
operating cash generation moved back towards expected levels
-- The increase in net debt in the period reflects the expected
payment of GBP10.2m of contingent consideration in H1. The Group
also paid GBP0.6m in initial consideration for the small bolt-on
acquisitions completed in the period
-- The interim dividend has been increased to 0.13p (H1 2021:
0.12p) reflecting the Board's continued confidence in the Group's
prospects
Current trading and outlook
-- The Group anticipates that current conditions will lead to
increased volatility in the Energy Assurance market in the short
term, albeit this is not expected to have a material net impact on
H2 performance
-- The over-arching necessity for energy efficiency initiatives
should support continued strong demand for the value added by
Energy Optimisation services in H2
-- ESG services are expected to make further favourable progress in H2
-- The Board remains confident in achieving its full year
expectations noting it is also mindful of the unprecedented
conditions in UK energy markets which are very challenging for the
Group's customers
-- The long-term opportunities in the Group's markets have been
made even more apparent by the current energy crisis and the Board
believes that Inspired's proven strategy will enable it to
capitalise on these opportunities as market conditions
stabilise
Commenting on the results, Mark Dickinson, CEO of Inspired,
said: "We are pleased to have delivered solid financial and
operational progress during H1. The elevated volatility in the
energy market has made energy procurement challenging for
customers, and our staff have gone above and beyond during this
time to support them. We have been delighted by the momentum
achieved in the Optimisation and ESG divisions, as these offerings
become ever more relevant to our customers in the current
climate.
"Whilst the economic backdrop continues to present risks, our
solid first half performance, strong market position and unique
ability to support customers across a wide offering, provide us
with confidence for H2 and beyond."
Note
*Adjusted EBITDA is earnings before interest, taxation,
depreciation, and amortisation, excluding exceptional items and
share-based payments.
**Adjusted profit before tax is earnings before tax,
amortisation of intangible assets (excluding internally generated
amortisation related to computer software and customer databases),
exceptional items, share-based payments, the change in fair value
of contingent consideration and foreign exchange gains/(losses) (A
reconciliation of Adjusted profit before tax to reported profit
before tax can be found in note 3)
***Underlying cash generated from operations is cash generated
from operations, as adjusted to remove the impact of restructuring
costs and fees associated with acquisitions.
****Adjusted diluted earnings per share represents the diluted
earnings per share, as adjusted to remove amortisation of
intangible assets (excluding internally generated amortisation
related to computer software and customer databases), exceptional
items, share-based payments, the change in fair value of contingent
consideration and foreign exchange gains/(losses).
For further information, please contact:
Inspired PLC www.inspiredplc.co.uk
Mark Dickinson, Chief Executive Officer +44 (0) 1772 689 250
Paul Connor, Chief Financial Officer
David Cockshott, Chief Commercial
Officer
Shore Capital (Nomad and Joint Broker) +44 (0) 20 7408 4090
Patrick Castle
James Thomas
Peel Hunt LLP (Joint Broker)
Mike Bell
Ed Allsopp +44 (0) 20 7418 8900
Alma PR +44 (0) 20 3405 0205
Justine James +44 (0) 7525 324431
Hannah Campbell Inspired@almapr.co.uk
Will Ellis Hancock
Chairman's Statement
The continued progress made during the period is, of course,
placed into context with the on-going global energy crisis, which
has seen significant uncertainty across commodity and energy
markets, driving record energy price inflation. Whilst this has
created market volatility, it has further highlighted the
importance of energy management as an essential Board level
priority. The Group continues to take every opportunity to help
customers mitigate the cost of energy and manage their energy
consumption and carbon emissions during these extraordinary
times.
The Board is pleased to report a period in which the Group has
continued to deliver solid organic growth, in line with its
expectations.
Acquisitions
During H1, the Group acquired two trading subsidiaries of
Information Prophets Limited, in whom the Group previously held a
strategic investment position. The businesses will enable Inspired
to continue to strengthen its market leading position in
software-enabled services.
Dividend
Since IPO in 2011, Inspired has established a track record of
delivering profitable and cash-generative growth, which has
facilitated a consistent and progressive dividend policy.
Accordingly, the Board is pleased to announce an interim
dividend of 0.13 pence (H1 2021: 0.12 pence) . The dividend aligns
with the Board's stated policy of a dividend cover of at least 3x
earnings, with the objective of delivering progressive dividend
growth over time.
The interim dividend will be paid on 8 December 2022 to all
shareholders on the register at close of business on 14 October
2022. The shares will be marked ex-dividend on 13 October 2022.
Staff
On behalf of the Board, I would like to thank our colleagues,
who continue to work tirelessly to support our customers through
the challenges of these unprecedented times. We continue to invest
in our valued team and the business. The Group's priority remains
to help customers mitigate the rising cost of energy, manage their
energy consumption and continue to reduce carbon emissions.
Richard Logan
Chairman
5 September 2022
Chief Executive Officer's Statement
I am pleased to report on the Group's results for H1 2022, which
are in line with the Board's expectations, despite the most
challenging energy market conditions that anyone in the industry
has experienced.
Volatility in the energy markets increased significantly during
2022. It has been a fast moving and difficult environment in which
to operate, and we would, first and foremost, like to pay testament
to our teams who have gone above and beyond to support their
customers and the business.
Energy markets
As has been well documented in the press, the current energy
markets are at unprecedented levels and the energy crisis continues
to place pressure on energy suppliers.
We observe energy suppliers struggling to provide proposals to
consumers, as they contend with exceptional market price volatility
and declining access to credit insurance for the businesses they
supply. We are cognisant that these challenges create both risks
and opportunities: they have the potential to fundamentally change
the operation of the Energy Assurance marketplace and further
accelerate the demand for Energy Optimisation Services.
During this period of uncertainty, the Group has continued to
work tirelessly to support customers in the face of such
challenges. We are of course keeping market developments closely
under review, to ensure that the business remains correctly
structured to manage any change in market dynamics.
We are pleased to update that further to the Group's
announcement of 21 March 2022, relating to the potential financial
risks associated with its business relationship with Gazprom
Marketing and Trading Retail Limited ("Gazprom"), the parent
company of the Gazprom entities in the UK, Gazprom Germania, was
taken into public ownership in the immediate term by the German
government. As a result, the former UK Gazprom entity under the
name SEFE Energy Limited is now operating independently from the
Russian state, meaning that the potential risks highlighted in
March have now diminished significantly.
Energy Assurance Division
As a result of current energy market conditions, we anticipate
changes in customer procurement behaviour in the short term: both
increased customer churn and increased new business opportunity.
From our experience to date, we do not expect an adverse impact on
overall trading of the Energy Assurance Division during FY22.
The primary risk posed by the current environment is that
continued energy cost inflation could create a financial viability
risk for some of the Group's corporate customers. Our prudent
planning assumption is that this may impact organic growth rates in
the next 18 months. We are keen to learn of the Government's plans
to support our customers in meeting the severe challenges of
utility inflation.
Energy Optimisation Services
The benefits of being able to serve a consumer's entire energy
cost equation has been highlighted during these unprecedented times
and further underlines the strength of the Group's strategy.
Current market prices have transformed the economics of
investments in energy reduction for our customers. Combined with
the drive for delivering net zero, the Energy Optimisation Services
division represents a key opportunity to help UK corporate
businesses navigate through the current energy market crisis: we
are seeing record interest in optimisation opportunities.
Through the strengthening of the growth drivers, we expect a
continuation in the change of Group's revenue mix, through
outperformance in Energy Optimisation Services in FY23.
ESG Services
We continue to be delighted by the performance of the ESG
Services division, which has developed cost effective market
leading solutions for our customers. Whilst still early in its
evolution, it continues to perform at the higher end of
management's expectations.
The full set of TCFD and ESG disclosures for Inspired PLC can be
found on our website:
https://inspiredplc.co.uk/wp-content/uploads/2022/08/Inspired-2021-TCFD-Report.pdf
https://inspiredplc.co.uk/wp-content/uploads/2022/08/Inspired_2021-ESG-Report-1.pdf
These were produced using the same processes we provide to our
customers; these processes are increasingly recognised as market
leading. Full ESG disclosures have been provided to 33 customers to
date, ranging from FTSE 100 to smaller publicly listed and private
companies. A range of further ESG services have been provided to
453 customers to date.
Software Solutions
The Software Solutions division continues to deliver on
developing its suite of solutions that underpin the delivery of the
Group's technology enabled services.
The Unify platform is used to provide valuable data-led services
to a growing number of energy advisors, or Third-Party
Intermediaries ("TPIs"). In the first half of 2022, the number of
TPIs that subscribed to the Unify platform increased from 58 to 64,
generating healthy recurring SaaS revenue.
M&A strategy
Our current focus is on continuing to integrate and grow the
acquisitions made in earlier years. We do not plan to engage in
significant M&A activity in the short term but anticipate
further good M&A opportunities in the medium to longer
term.
Outlook
We have seen unprecedented conditions in UK energy markets
during the first half of 2022, which are anticipated to persist
through H2 at the very least. These conditions will continue to
present a very challenging backdrop for the Group's customers.
We anticipate this will lead to more volatile conditions in the
Energy Assurance market in the short term, which we expect will
limit the growth opportunities in the near future, albeit this is
not expected to have a material net impact on H2 performance.
Conversely, these conditions and the increasingly compelling value
represented by energy efficiency initiatives should support
continued strong demand for Energy Optimisation services in H2.
Although smaller in scale, ESG Services should also see continued
progress over the remainder of FY22.
Whilst mindful of the current backdrop, and in particular the
risk posed by prolonged inflation in energy costs to our customers,
we have entered the second half in a solid position. Our divisions
are well aligned with market demands and requirements, and we have
a dedicated and hard-working team as well as a strong balance
sheet, all of which provides the Board with confidence in achieving
its full year expectations.
Market conditions beyond the current year are difficult to
predict at this point, including the impact of cost base inflation,
but the long-term opportunities for the Group have been made even
more apparent by the current energy crisis and the Board believes
that Inspired's proven strategy will enable it to capitalise on
these as market conditions normalise.
On behalf of the Board, I would like to thank our colleagues,
customers and suppliers for their continued support and
collaboration during these unprecedented times.
Mark Dickinson
Chief Executive Officer
5 September 2022
Chief Financial Officer's Statement
We have delivered a 24% increase in revenue and a 10% increase
in Adjusted EBITDA in H1 2022, as the Group continues to navigate
the macro-economic challenges and the global energy crisis.
Divisional performance
Energy Solutions Division
The Energy Solutions Division comprises Energy Assurance
Services and Energy Optimisation Services.
Energy Assurance Services
Energy Assurance Services trading in the period remained in line
with expectations. Energy Assurance Services generated 45% of total
Group revenues in H1 2022 (H1 2021: 55%) being GBP18.4 million (H1
2021: GBP17.9 million) an increase of 3% organically.
Energy Assurance Services contributed adjusted EBITDA of GBP8.3
million (H1 2021: GBP8.3 million). The adjusted EBITDA percentage
margin was 45% (H1 2021: 47%).
Energy Optimisation Services
The Group's Energy Optimisation Services division continued to
gain momentum throughout H1 2022 with revenues increasing 49%
organically, amounting to GBP19.6 million (H1 2021: GBP13.2
million) contributing 49% of total Group revenues in the period (H1
2021: 40%). Energy Optimisation Services contributed adjusted
EBITDA of GBP3.1 million, (H1 2021: GBP1.5 million) an increase of
107%. The optimisation services division in H2 2022 delivered
Adjusted EBITDA margins of 16% (FY2021: 17%) reflecting the impact
of product mix during the period.
Demand for energy optimisation services continues to increase,
with strong underlying drivers, including high commodity prices and
the drive to net-zero. As a result, the Board expects to see a
continued shift in revenue mix towards Energy Optimisation
Services.
ESG Solutions Division
The ESG Solutions Division comprises ESG Disclosure Services and
ESG Impact Services.
ESG Solutions generated revenues of GBP1.2 million (H1 2021:
GBP0.4 million), delivering 215% growth organically, reflective of
the growing market for these services. ESG Solutions contributed
modestly to Adjusted EBITDA during the period, at GBP0.1 million
(H1 2021: GBPnil). The increasing focus of investors and businesses
on Net Zero Carbon targets, combined with mandatory requirements
for businesses to make ESG disclosures from 2022, provides a
favourable backdrop to continued investment in the Inspired ESG
division.
Software Solutions Division
The Group's Software Solutions Division delivered revenue of
GBP1.2 million (H1 2021: GBP1.2 million), an increase of 5% and
generated Adjusted EBITDA of GBP0.9 million (H1 2021: GBP0.9
million), with the division producing a strong sustainable Adjusted
EBITDA margin of 74% (FY 2021: 74%).
Group results
PLC costs were GBP2.7 million (6.7% of revenue) (H1 2021: GBP2.0
million; 6.1% of revenue), reflecting the increased investment in
central functions, including Marketing and Finance, to support the
growth opportunities within the Optimisation and ESG Services
Division.
Overall, the Group generated Adjusted EBITDA for the period of
GBP9.7 million (H1 2021: GBP8.8 million) an increase of 10%. After
deducting charges for depreciation, amortisation of internally
generated intangible assets and finance expenditure, the adjusted
profit before tax for the period was GBP6.5 million (H1 2021:
GBP6.0 million), an increase of 8%.
Under IFRS measures the Group reported a profit before tax for
the half-year of GBP2.4 million (H1 2021: GBP0.9 million), with
reported profit before tax in the period impacted significantly by
charges of GBP3.6 million (2021 H1: GBP1.5 million) for the
amortisation of intangible assets as a result of acquisitions,
share-based payment charges, fees associated with acquisitions,
restructuring costs and the changes in the fair value of contingent
consideration.
A full reconciliation of the Group's adjusted profit before tax
to its reported profit before tax is included at note 3.
Alternative performance measures
Acquisition activity can significantly distort underlying
financial performance from IFRS measures. The Board therefore also
reports adjusted metrics, as well as IFRS measures, for the benefit
of primary users of the Group's financial statements. Segmental
reporting can be found in the Accounting Policies section below.
Reconciliations to Adjusted Profit Before Tax and Adjusted Fully
Diluted EPS can be found in note 3.
Cash generation
Group cash generated from operations during H1 was GBP5.0
million (H1 2021: cash outflow of GBP0.5 million). Excluding
non-recurring fees associated with restructuring costs and deal
fees, cash generated from operations was GBP5.8 million (H1 2021:
GBP1.1 million). The improved comparative cash generation position
reflects in part the abnormal profile of Optimisation Services
trading during H1 2021, impacted by COVID restrictions at that
time.
Within trade receivables within the Energy Optimisation Services
division is an aged balance of GBP2.2 million due from a major
public sector Optimisation customer. As noted in the 2021 final
results, sustained focus is being applied to ensuring the debt is
collected in the most efficient way, noting the Board had expected
to make further collections during H1 2022 which have not
materialised. The Board believes the commercial view taken to
support the client, will further strengthen the relationship with a
material customer into the future.
Excluding this exceptional aged debt not collected during the
period, cash generated from operations in the period was in line
with management expectations, and cash generation is expected to
continue to improve during H2 and beyond.
The increase in net debt reflects a period in which the cash
generation of the Group was offset by the payment of GBP0.6 million
initial cash consideration for I-Prophets Compliance Limited and
Digital Energy Limited, and GBP10.2 million of contingent cash
consideration to the vendors of Ignite Energy LTD, Businesswise
Solutions Ltd and LSI Independent Utilities Brokers Limited.
Exceptional costs
Exceptional costs of GBP0.76 million (H1 2021: GBP1.04 million)
were incurred in the period, which includes GBP0.14 million (H1
2021: GBP0.80 million) of deal fees associated with acquisitions
completed in the period.
Restructuring costs were GBP0.62 million (H1 2021: GBP0.24
million), related to restructuring programmes associated with the
integration of acquisitions.
Change in fair value of contingent consideration
The fair value of contingent consideration at the balance sheet
date is a judgement of the contingent consideration which will
become payable based on a weighted average range of performance
outcomes of the acquired business during the earn out period, which
is subsequently discounted for the time value of money and
risk.
The Group recognised a GBP0.9 million loss (H1 2021: GBP0.9
million) in the period as a result of changes in the fair value of
contingent consideration which was treated as exceptional, which
purely related to the unwinding of discount rate.
At 30 June 2022 the Group has deferred contingent consideration
of GBP4.2 million from the sale of its SME division in 2020. The
primary risk of recovery of this balance is the ability of SME
entities to withstand the risks posed by continued energy cost
inflation as a result of the energy crisis, along with the
possibility of prolonged reduction in energy consumption by SME
customers in an effort to reduce costs. We continue to assess the
recoverability of this balance as we get greater visibility.
Exceptional costs and changes in fair value of contingent
consideration are considered by the Directors to be material in
nature and non-recurring; they, therefore, merit separate
identification to give a true and fair view of the Group's result
for the period.
Financial position and liquidity
At 30 June 2022, the Group's net debt was GBP42.9 million (H1
2021: GBP30.17 million - FY 2021: GBP32.3 million). In addition to
cash and cash equivalents of GBP6.4 million on hand, as at 30 June
2022, approximately GBP10.5 million of the Group's GBP60.0 million
Revolving Credit Facility is undrawn with an additional GBP25.0
million accordion option available, subject to covenant
compliance.
Dividend
The Board is pleased to confirm an interim dividend of 0.13
pence per share (H1 2021: 0.12 pence) in line with the Group's
revised policy of paying dividends covered by at least 3.0x
earnings.
The interim dividend will be paid on 8 December 2022 to all
shareholders on the register at close of business on 14 October
2022. The shares will be marked ex-dividend on 13 October 2022.
Summary
The strategic and financial initiatives delivered in the period
have ensured the Group is well placed to deliver our strategic
growth plan, whilst managing the additional risks created by the
volatility and uncertainty within commodity and energy markets.
Paul Connor
Chief Financial Officer
5 September 2022
Group Statement of Comprehensive Income
For the six months ended 30 June 2022
Year ended
31 December
2021
Six months Six months
ended 30 ended 30
June 2022 June 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------- ----- ------------- --- ------------- --- -------------
Revenue 40,448 32,616 67,941
Cost of sales (13,635) (8,525) (17,249)
------------- ------------- -------------
Gross profit 26,813 24,091 50,692
Administrative expenses (23,184) (22,562) (47,823)
------------- ------------- -------------
Operating profit 3,629 1,529 2,869
------------- ------------- -------------
Analysed as:
Earnings before exceptional
costs, depreciation,
amortisation and share-based
payment costs 9,672 8,819 19,791
Fees associated with
acquisition (144) (803) (1,038)
Restructuring costs (615) (238) (1,393)
Change in fair value
of contingent consideration (943) (938) (4,735)
Depreciation (936) (937) (1,870)
Amortisation of acquired
intangible assets (1,359) (2,741) (4,415)
Amortisation of internally
generated intangible
assets (1,331) (1,069) (2,554)
Share-based payment
costs (715) (564) (1,030)
------------- ------------- -------------
3,629 1,529 2,869
------------------------------- ----- ------------- --- ------------- --- -------------
Finance expenditure (1,211) (644) (1,860)
Other financial items 11 50 105
------------- ------------- -------------
Profit before income
tax 2,429 935 1,114
Income tax (expense)/credit (510) (178) 524
------------- ------------- -------------
Profit for the period 1,919 757 1,638
------------- ------------- -------------
Attributable to:
Equity owners of the
company 1,919 757 1,638
------------- ------------- -------------
Other comprehensive
income:
Exchange differences
on translation of
foreign operations 354 (760) (753)
------------- ------------- -------------
Total other comprehensive
income/ (expense)
for the year 354 (760) 885
============= ============= =============
Total comprehensive
income/(expense) for
the year 2,273 (3) 885
============= ============= =============
Attributable to:
Equity owners of the
company 2,273 (3) 885
Note
Diluted earnings per
share attributable
to the equity holders
of the Company (pence) 3 0.18 0.07 0.16
Adjusted diluted earnings
per share attributable
to the equity holders
of the Company (pence) 3 0.55 0.53 0.16
------------------------------- ----- ------------- --- ------------- --- -------------
Group Statement of Financial Position
At 30 June 2022
Six months Six months
ended 30 ended 30 Year ended
June 2022 June 2021 31 December
(unaudited) (unaudited) 2021 (audited)
Note GBP000 GBP000 GBP000
----------------------------- ----- ------------- ------------- ----------------
ASSETS
Non-current assets
Investments 1,137 898 1,461
Goodwill 6 76,895 73,730 76,111
Other intangible assets 6 18,247 18,027 18,291
Property, plant and
equipment 4 2,743 2,357 2,452
Right of use assets 5 1,875 3,142 2,180
100,897 98,154 100,495
Current assets
Trade and other receivables 7 36,424 26,608 33,448
Deferred contingent
consideration 4,208 6,217 4,529
Inventories 370 373 300
Cash and cash equivalents 6,410 15,565 12,944
------------- ------------- ----------------
47,412 48,763 51,221
Total assets 148,309 146,917 151,716
------------- ------------- ----------------
LIABILITIES
Current liabilities
Trade and other payables 8 10,888 7,948 12,315
Lease liabilities 834 527 860
Current tax liability 2,560 2,497 1,823
Contingent consideration 9,998 7,551 14.586
24,280 18,523 29,584
Non-current liabilities
Bank borrowings 49,346 45,730 45,847
Lease liabilities 1,049 2,207 993
Contingent consideration 2,523 11,005 7,165
Deferred tax liability 1,522 2,032 1,522
Interest rate swap 14 80 25
54,454 61,054 55,552
Total liabilities 78,734 79,577 85,136
------------- ------------- ----------------
Net assets 69,575 67,340 66,580
============= ============= ================
EQUITY
Share capital 1,219 1,216 1,219
Share premium account 60,930 67,490 60,923
Merger relief reserve 20,995 20,995 20,995
Retained earnings (9,117) (9,661) (11,036)
Share based payments
reserves 7,094 5,913 6,379
Investment on own
shares (36) (6,742) (36)
Translation reserve (127) (488) (481)
Reverse acquisition
reserve (11,383) (11,383) (11,383)
Total equity 69,575 67,340 66,580
Group Statement of Cash Flows
For the six months ended 30 June 2022
Six months Six months
ended 30 ended 30 Year ended
June 2022 June 2021 31 December
(unaudited) (unaudited) 2021 (audited)
Note GBP000 GBP000 GBP000
------------------------------- ----- ------------ ------------ ---------------
Cash flows from operating
activities
Profit before income
tax 2,429 935 1,114
Adjustments
Depreciation and impairment 936 937 1,870
Amortisation and impairment 2,690 3,810 6,969
Share based payment costs 715 564 1,030
Finance expenditure 1,200 594 1,755
Exchange rate variances (449) (377) 266
Change in fair value
of contingent consideration 943 938 4,735
Cash flows before changes
in working capital 8,464 7,401 17,739
Movement in working
capital
Increase in inventories (71) (254) (180)
Increase in trade and
other receivables (2,179) (6,490) (9,841)
(Decrease)/increase in
trade and other payables (1,207) (1,165) 185
Cash generated from
operations 5,007 (508) 7,903
------------ ------------ ---------------
Income taxes paid (215) (313) (869)
Net cash flows from
operating activities 4,792 (821) 7,034
Cash flows from investing
activities
Purchase of property,
plant and equipment (646) (393) (998)
Payments to acquire intangible
assets (2,742) (2,242) (5,866)
Contingent consideration
paid (10,174) (600) (1,086)
Contingent consideration
received 320 708 -
Repayment/(provision)
of working capital facility
to discontinued operation 125 (300) (500)
Sale of investment 324 - -
Acquisition of subsidiary,
net of cash (633) (6,530) (7,268)
Net cash flows from
investing activities (13,426) (9,357) (15,718)
Cash flows from financing
activities
New bank loans 3,500 - -
Finance expenses (907) (764) (2,069)
Repayment of lease liabilities (546) (825) (1,443)
Proceeds from issue of
new shares 7 504 645
Dividends paid - - (2,256)
------------ ------------ ---------------
Net cash flows from
financing activities 2,054 (1,085) (5,123)
Net (decrease)/increase
in cash and cash equivalents (6,580) (11,263) (13,807)
Cash and cash equivalents
brought forward 12,944 26,884 26,884
Exchange differences
on cash and cash equivalents 46 (56) (133)
------------ ------------ ---------------
Cash and cash equivalents
carried forward 6,410 15,565 12,944
============ ============ ===============
Group Statement of Changes in Equity
For the six months ended 30 June 2022
Share Merger Share-based Investment Reverse Total
Share premium relief payment Retained in own Translation acquisition shareholders'
capital account reserve reserve earnings shares reserve reserve equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
January 2021 1,202 67,000 20,995 5,349 (10,418 (6,742) 272 (11,383) 66,275
------- ------- ------- ----------- -------- ----------- ------------ ----------- -------------
Profit for the year - - - - 1,638 - - - 1,638
Other comprehensive
income - - - - - - (753) - (753)
Total comprehensive
income for the
year - - - - 1,638 - (753) - 885
Share-based payment
cost - - - 1,030 - - - - 1,030
Shares issued (8
April 2021) 13 376 - - - - - - 389
Shares issued (22
June 2021) 1 114 - - - - - - 115
Shares issued (28
July 2021) 1 62 - - - - - - 63
Shares issued (15
September 2021) 1 53 - - - - - - 54
Shares issued (21
December 2021) 1 12 - - - - - - 13
Shares issued to
EBT - (6,694) - - - 6,706 - - 12
Dividends paid - - - - (2,256) - - - (2,256)
------- ------- ------- ----------- -------- ----------- ------------ ----------- -------------
Total transactions
with owners 17 (6,077) - 1,030 (618) 6,706 (753) - 305
------- ------- ------- ----------- -------- ----------- ------------ ----------- -------------
Balance at 31
December 2021 1,219 60,923 20,995 6,379 (11,036) (36) (481) (11,383) 66,580
-------
Profit for the
period - - - - 1,919 - - - 1,919
Other comprehensive
income - - - - - - 354 - 354
Total comprehensive
income for the
period - - - - 1,919 - 354 - 2,273
Share-based payment
cost - - - 715 - - - - 715
Shares issued (12
April 2022) - 7 - - - - - - 7
Total transactions
with owners - 7 - 715 1,919 - 354 - 2,995
------- ------- ------- ----------- -------- ----------- ------------ ----------- -------------
Balance at 30 June
2022 1,219 60,930 20,995 7,094 (9,117) (36) (127) (11,383) 69,575
------- ------- ------- ----------- -------- ----------- ------------ ----------- -------------
1. Accounting Policies
Basis of preparation
The financial information set out in this announcement does not
constitute the statutory accounts of the Group for the period ended
30 June 2022. Whilst the financial information included in this
interim announcement has been computed in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRS). They have been prepared on an accrual basis
and under the historical cost convention except for certain
financial instruments measured at fair value. This announcement in
itself does not contain sufficient information to comply with
IFRS.
Details of the accounting policies are those set out in the
annual report for the year ended 31 December 2021. The accounting
policies in this announcement are consistent with those set out in
the annual report for the year ended 31 December 2021.
2. Segmental information
Revenue and segmental reporting
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Group's Executive Directors.
The Group reports under four reporting segments, namely Assurance,
Optimisation, Software and ESG.
Six months ended 30 June 2022 Six months ended 30 June 2021
Assurance Optimisation Software ESG PLC Total Assurance Optimisation Software ESG PLC Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 18,378 19,619 1,233 1,218 - 40,448 17,877 13,174 1,179 386 - 32,616
Cost of sales (1,555) (11,964) (51) (65) - (13,635) (1,298) (7,195) (32) - - (8,525)
------------- --------- ------------ -------- ------- ------- -------- --------- ------------ -------- ------ ------- --------
Gross profit 16,823 7,655 1,182 1,153 - 26,813 16,579 5,979 1,147 386 - 24,091
------------- --------- ------------ -------- ------- ------- -------- --------- ------------ -------- ------ ------- --------
Overheads (8,852) (4,590) (270) (1,080) (4,766) (19,558) (8,467) (4,495) (173) (360) (4,320) (17,815)
EBITDA 7,971 3,065 912 73 (4,766) 7,255 8,112 1,484 974 26 (4,320) 6,276
------------- --------- ------------ -------- ------- ------- -------- --------- ------------ -------- ------ ------- --------
Analysed as:
Adjusted
EBITDA 8,337 3,069 912 73 (2,719) 9,672 8,321 1,484 974 26 (1,986) 8,819
Share-based
payments - - - - (715) (715) - - - - (564) (564)
Exceptional
costs (366) (4) - - (1,332) (1,702) (209) - - - (1,770) (1,979)
--------- ------------ --------- ------------
7,971 3,065 912 73 (4,766) 7,255 8,112 1,484 974 26 (4,320) 6,276
--------- ------------ -------- ------- ------- -------- --------- ------------ -------- ------ ------- --------
Depreciation (936) (937)
Amortisation (2,690) (3,810)
Finance
expenditure (1,200) (644)
Other
financial
items - 50
-------- --------
Profit before
income tax 2,429 935
-------- --------
3. Earnings Per Share
The earnings per share is based on the net profit for the period
attributable to ordinary equity holders divided by the weighted
average number of ordinary shares outstanding during the
period.
Year ended
31 December
2021
Six months Six months
ended 30 ended 30
June 2022 June 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
---------------------------------- ------------- --- ------------- --- -----------------
Profit/ attributable to equity
holders of the Group 1,919 757 1,638
Amortisation of acquired
intangible assets 1,359 2,741 4,415
Deferred tax in respect of
amortisation (258) (465) (783)
Changes in fair value of
contingent consideration 943 938 4,735
Foreign exchange variation 263 (224) (339)
Fees associated with acquisition 144 803 1,038
Share-based payments costs 715 564 1,030
Restructuring costs 615 238 1,280
Impairment of right of use
assets - - 113
Adjusted profit attributable
to equity holders of the
Group 5,700 5,352 13,127
------------- ------------- -----------------
Weighted average number of
ordinary shares in issue
(000) 974,970 966,784 970,589
Dilutive effect of share
options (000) 67,062 44,674 40,870
------------- ------------- -----------------
Diluted weighted average
number of ordinary shares
in issue (000) 1,042,032 1,011,458 1,011,459
------------- ------------- -----------------
Basic earnings per share
(pence) 0.20 0.08 0.17
Diluted earnings per share
(pence) 0.18 0.07 0.16
Adjusted basic earnings per
share (pence) 0.58 0.55 1.35
Adjusted diluted earnings
per share (pence) 0.55 0.53 1.30
The weighted average number of shares in issue for the adjusted
diluted earnings per share include the dilutive effect of the share
options in issue to senior staff of Inspired.
Adjusted earnings per share represents the earnings per share,
as adjusted to remove the effect of the fees associated with
acquisition, amortisation of intangible assets (excluding
amortisation related to computer software and customer databases),
share-based payments and exceptional items which have been expensed
to the income statement in the period. Adjusted profit before tax
is calculated as follows:
Year ended
31 December
2021
Six months Six months
ended 30 ended 30
June 2022 June 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------------------------- ------------- --- ------------- --- -------------
Profit before tax 2,429 935 1,114
Share-based payments costs 715 564 1,030
Amortisation of acquired
intangible assets 1,359 2,741 4,415
Foreign exchange variation 263 (224) (339)
Exceptional costs:
Fees associated with acquisition 144 803 1,038
Restructuring costs 615 238 1,280
Impairment of right of use
assets - - 113
Change in fair value of
contingent consideration 943 938 4,735
Adjusted profit before tax 6,468 5,995 13,386
------------- ------------- -------------
Acquisitional activity can significantly distort underlying
financial performance from IFRS measures and therefore the Board
deems it appropriate to report adjusted metrics as well as IFRS
measures for the benefit of primary users of the Group financial
statements.
4. Property, plant and equipment
Fixtures and Motor Computer Leasehold Office
fittings vehicles equipment improvements equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
As at 1 January
2021 937 158 2,412 592 - 4,099
Acquisitions
through business
combinations - - - 222 - 222
Foreign exchange
variances (4) (5) (11) (5) - (25)
Additions 15 - 981 2 - 998
Disposals (228) (46) (378) (5) - (657)
At 31 December
2021 720 107 3,004 806 - 4,637
---------------- --------- ---------------- ---------------- --------------- -------
Reclassification (426) 42 - 384 - -
---------------- --------- ---------------- ---------------- --------------- -------
At 31 December
2021 (restated) 294 149 3,004 1,190 - 4,637
---------------- --------- ---------------- ---------------- --------------- -------
Foreign exchange
variances 2 2 - 1 (1) 4
Additions 8 - 357 - 281 646
Disposals - (38) - - - (38)
At 30 June 2022 304 113 3,361 1,191 280 5,249
---------------- --------- ---------------- ---------------- --------------- -------
Depreciation
As at 1 January
2021 743 70 638 326 1,777
Charge for the
year 88 4 604 120 816
Disposals (167) (36) (200) (5) (408)
At 31 December
2021 664 38 1,042 441 2,185
Reclassification (474) 38 391 45 - -
---------------- --------- ---------------- ---------------- --------------- -------
At 31 December
2021 (restated) 190 76 1,433 486 - 2,185
---------------- --------- ---------------- ---------------- --------------- -------
Charge for the
period 19 36 110 60 124 349
Foreign exchange
variance 1 6 1 - - 8
Disposals - (36) - - - (36)
At 30 June 2022 210 82 1,544 546 124 2,506
---------------- --------- ---------------- ---------------- --------------- -------
Net Book Value
At 30 June 2022 94 31 1,817 645 156 2,743
---------------- --------- ---------------- ---------------- --------------- -------
At 31 December
2021 56 69 1,962 365 2,452
---------------- --------- ---------------- ---------------- --------------- -------
5. Right of use assets
Fixtures and fittings Motor vehicles Property Total
GBP000 GBP000 GBP000 GBP000
Cost
As at 1 January 2021 490 314 3,326 4,130
Acquisitions through business combinations - 4 44 48
Remeasurement of finance lease - - (17) (17)
Additions 133 106 386 625
Disposals - (71) (50) (121)
At 31 December 2021 623 353 3,689 4,665
Additions 301 54 245 600
Foreign exchange variances - - (14) (14)
Disposals (368) (5) (257) (630)
At 30 June 2022 556 402 3,663 4,621
--------------------- -------------- -------- -------
Depreciation
As at 1 January 2021 138 86 1,313 1,537
Charge for the year 144 116 681 941
Disposals - (56) (50) (106)
At 31 December 2021 282 146 1,944 2,372
Charge for the period 63 104 420 587
Disposals (211) (5) (110) (326)
At 30 June 2022 134 245 2,254 2,633
--------------------- -------------- -------- -------
Impairment
As at 1 January 2021 - - - -
Impairment for the year - - 113 113
At 31 December 2021 - - 113 113
At 30 June 2022 - - 113 113
--------------------- -------------- -------- -------
Net Book Value
At 30 June 2022 422 157 1,296 1,875
--------------------- -------------- -------- -------
At 31 December 2021 341 207 1,632 2,180
--------------------- -------------- -------- -------
6. Intangible assets and goodwill
Total other
Computer Trade name Customer Customer intangibles
software GBP000 contracts relationships GBP000 Goodwill Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January
2021 16,315 115 18,076 7,511 42,017 63,776 105,793
Additions 5,821 45 - - 5,866 - 5,866
Acquisitions
through
business
combinations - - 3,491 - 3,491 12,494 15,985
Adjustments
to previous
business
combinations - - 8 - 8 - 8
Disposals (819) - - - (819) - (819)
Foreign
exchange
variances - - - - - (159) (159)
At 31
December
2021 21,317 160 21,575 7,511 50,563 76,111 126,674
Additions 2,742 - - - 2,742 - 2,742
Acquisitions
through
business
combinations - - - - - 730 730
Disposals (95) - - - (95) - (95)
Foreign
exchange
variance (1) - - - (1) 54 53
At 30 June
2022 23,963 160 21,575 7,511 53,209 76,895 130,104
------------- ------------ ------------ -------------- ------------ -------- -------
Amortisation
As at 1
January 2021 8,829 30 13,582 3,225 25,666 - 25,666
Charge for
the year 2,933 7 3,214 815 6,969 - 6,969
Disposals (363) - - - (363) - (363)
At 31
December
2021 11,399 37 16,796 4,040 32,272 - 32,272
Charge for
the period 1,520 4 775 391 2,690 - 2,690
At 30 June
2022 12,919 41 17,571 4,431 34,962 - 34,962
------------- ------------ ------------ -------------- ------------ -------- -------
Net Book
Value
At 30 June
2022 11,044 119 4,004 3,080 18,247 76,895 95,142
------------- ------------ ------------ -------------- ------------ -------- -------
At 31
December
2021 9,918 123 4,779 3,471 18,291 76,111 94,402
------------- ------------ ------------ -------------- ------------ -------- -------
Computer software is a combination of assets internally
generated and assets acquired through business combinations.
Amortisation charged in the period to 30 June 2022 associated with
computer software acquired through business combinations is
GBP190,000. The additional GBP1,330,000 charged in the period
relates to the amortisation of internally generated computer
software.
7. Trade and other receivables
30 June 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
---------------------------------- ------- --------- -------------
Trade receivables 16,351 12,282 16,492
Other receivables 1,338 806 1,472
Deferred contingent consideration 4,208 6,217 4,529
Prepayments 4,265 3,620 3,802
Accrued income 14,470 9,900 11,682
---------------------------------- ------- --------- -------------
40,632 32,825 37,997
---------------------------------- ------- --------- -------------
8. Trade and other payables
30 June 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
-------------------------------- ------- --------- -------------
Trade payables 4,587 2,317 4,154
Social security and other taxes 2,918 2,626 3,504
Accruals 2,303 1,674 1,502
Deferred income 526 559 1,268
Other payables 554 772 1,887
-------------------------------- ------- --------- -------------
10,888 7,948 12,315
-------------------------------- ------- --------- -------------
9. Availability of this announcement
This announcement together with the financial statements herein
and a presentation in respect of the interim financial results are
available on the Group's website, www.inspiredplc.co.uk
This information is provided by RNS, the news service of the
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END
IR EANNSESNAEFA
(END) Dow Jones Newswires
September 06, 2022 02:00 ET (06:00 GMT)
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