TIDMCOR
RNS Number : 3579R
CORETX Holdings PLC
21 September 2017
CORETX Holdings plc
("CORETX", the "Group" or the "Company")
Unaudited interim results for the six months ended 30 June
2017
CORETX Holdings plc (AIM: COR), the mid-market network, cloud
and IT managed services provider, today announces its unaudited
interim results for the six months ended 30 June 2017. The results
include three months contribution from 365ITMS, which was acquired
in April 2017.
Highlights
-- Acquisition of 365ITMS for an enterprise value of GBP5.4m to
help drive growth in Collaboration (Unified Comms, Contact Centre
and Cloud Hosted Telephony)
-- Revenues of GBP29.6m (GBP19.2m) representing 54% growth (19% growth on a pro forma basis)
-- Gross Margins of GBP11.3m (GBP8.1m) representing 40% growth
(4% growth on a pro forma basis)
-- Trading EBITDA* of GBP3.0m (GBP2.4m) representing 27% growth
(6% growth on a pro forma basis)
-- Adjusted EBITDA** of GBP2.4m (GBP1.6m) representing 59%
growth (16% growth on a pro forma basis)
-- Strategic investment of GBP2.0m in 2017 underway, supporting
introduction of new products and services, which includes:-
o Commissioning of a new 20,000 sq ft purpose built IL3
certified facility in Dartford to support the expansion of CITADEL
(Lifecycle) solutions
o Launch of a range of new Cloud based Voice and Hosted
Telephony solutions
o Developing the new PACT Cyber Security business unit
o Expanding the Microsoft practice to take advantage of the
market opportunity in Office 365, Skype for Business and Azure
related services
o Recruiting specialists to provide consulting services in Voice
and Telephony, Cloud Migration, Cyber Security and Lifecycle
Management
o Development of pilot solutions for Hybrid Cloud and Cloud
Migration to support future growth in Cloud based services
o Modernisation of the CORETX MPLS network to improve resilience
and lower ongoing operating costs
o Expansion of the CORETX Learning Cloud to help improve the
skills and capabilities of our workforce
-- 365ITMS performing in line with expectations
-- Secured 34 new logo customers in H1 2017
-- Sales pipeline significantly stronger than this time last year
-- 24 apprentices now working across the business
Andy Ross, Chief Executive of CORETX, commented:
"Following the work done in 2016 to establish a stable business
platform and position CORETX as a leading player in the mid-market,
the main focus in the first half of 2017 has been to build out the
portfolio of products and services to allow us to drive better
organic growth in the future. We have continued to invest in areas
where we believe we can achieve better cross-sell opportunities
within our existing customer base, and increase our ability to
attract larger new logo customers. This organic growth has been
supported in the first half by the acquisition of 365ITMS in April
2017, providing a much stronger position in Collaboration (Unified
Comms, Contact Centre, Hosted Voice and Telephony).
We have also continued to invest in our people, expanding the
CORETX Learning Cloud to ensure our employees have the right level
of technical and managerial expertise and recruiting a number of
experienced consultants to help facilitate a much deeper engagement
with customers in each of our strategic growth areas of Cloud,
Collaboration, Cyber Security and Lifecycle Management.
The sales performance in H1 and the Sales Pipeline are both
significantly stronger than this time last year, and I am confident
that we are in a better competitive position as we move into the
second half of 2017. Demand in H1 2017 for our Private Cloud
platform has exceeded that seen in the whole of 2016 and we are
also working on a new approach to delivering platform-agnostic
Hybrid Cloud solutions for customers.
In January 2017 we announced two large CITADEL (Lifecycle)
contract wins with both contracts due to start immediately and run
throughout 2017. However, due to circumstances beyond our control,
one of these contracts is not due to properly commence until H2
2017 and, whilst this is likely to have a material impact on the
current financial year, the contract is expected to now be
materially larger than originally anticipated.
Also, in the first half of 2017 we decided to make a strategic
investment of GBP750k to build and launch a new business unit
called PACT (Protecting Against Cyber Threats) that will deliver a
range of cloud based solutions to help customers protect against
cyber-crime. We chose to build PACT rather than pay a significant
premium to buy an existing Cyber Security services business as we
believe this approach will create much better long-term value for
shareholders. Encouragingly, we have already secured a number of
new logo customer wins and expect the PACT business to continue to
grow and become profitable by the end of H1 2018."
Jonathan Watts, Chairman of CORETX, commented:
"Having laid the foundations in 2016 to become a leading
supplier in the Managed Services, Cloud and connectivity space to
the mid-market the focus in 2017 is to enhance and extend our
portfolio of products and services to meet the evolving needs of
our customers and in so doing drive better organic growth. This
includes long term strategic investment in building Cloud Migration
and Management capability, Collaboration, CITADEL and Cyber
Security solutions that make us more competitive in the market. It
is very encouraging to have signed up 34 new name customers in H1
2017, a higher number than we achieved over the full year in
2016.
Following the strategic acquisition of 365ITMS in April 2017 we
are continuing to identify further acquisitions that will
potentially strengthen our value propositions to customers and help
drive scale. The Board is confident that the progress made in H1
2017 will help to support and deliver increased shareholder value
in the coming years."
Note:
* Earnings Before Interest, Tax, Depreciation and Amortisation
and excludes transaction and integration costs, charges for
share-based payments and plc costs
**Earnings Before Interest, Tax, Depreciation and Amortisation
and excludes transaction and integration costs and charges for
share-based payments
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For further information please contact:
CORETX Holdings plc +44 (0)344 874 1000
Jonathan Watts, Chairman
Andy Ross, Chief Executive Officer
Julian Phipps, Chief Financial Officer
N+1 Singer (Nominated Advisor and Broker): +44 (0)207 496 3000
James Maxwell
Liz Yong
Alma PR: +44 (0)7780 901979
Josh Royston
Robyn Fisher
Further information on the Company can be found at
www.coretx.com.
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Note GBP000 GBP000 GBP000
------------------------------------- -------------- ------------ -------------
Revenue 3 29,592 19,199 43,422
Cost of sales (18,313) (11,151) (25,580)
---------------------------------- -------------- ------------ -------------
Gross profit 11,279 8,048 17,842
Administrative expenses (12,730) (11,361) (21,638)
---------------------------------- -------------- ------------ -------------
Operating loss (1,451) (3,313) (3,796)
---------------------------------- -------------- ------------ -------------
Analysed as:
Adjusted EBITDA* 2,433 1,629 4,902
Exceptional items 4 (447) (2,101) (2,950)
Depreciation of property,
plant and equipment (1,426) (995) (2,461)
Amortisation of intangible
assets (1,955) (1,753) (3,079)
Loss on disposal of
fixed assets - (60) (117)
Charges for share
based payments (57) (33) (91)
Net financial (costs) (149) (126) (301)
(Loss)/profit before
taxation (1,601) (3,439) (4,097)
Income tax 306 232 658
---------------------------------- -------------- ------------ -------------
(Loss)/profit for the
period from continuing
operations attributable
to owners of the parent
company (1,295) (3,142) (3,439)
(Loss)/profit for the
period from discontinued - (65) -
operations attributable
to owners of the parent
company
---------------------------------- -------------- ------------ -------------
(Loss)/profit for the
period after taxation (1,295) (3,207) (3,439)
---------------------------------- -------------- ------------ -------------
Other comprehensive
income:
Items that are or may
be classified subsequently
to profit or loss:
Foreign exchange translation
differences - equity
accounted investments 2 36 38
---------------------------------- -------------- ------------ -------------
(Loss)/profit for the
period and total comprehensive
income all attributable
to equity holders of
the parent (1,293) (3,171) (3,401)
---------------------------------- -------------- ------------ -------------
Basic and diluted earnings
per share
Basic (pence per share) (0.66) (1.83) (1.88)
Diluted (pence per
share) (0.66) (1.83) (1.88)
---------------------------------- -------------- ------------ -------------
* Earnings from continuing operations before interest, tax,
depreciation, amortisation, goodwill impairment, share based
payments, increase in derivative financial instruments and
exceptional costs
Consolidated Statement of Financial Performance
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
------------------------------- ---------------------- ---------- -------------
Non-current assets
Intangible assets 26,164 60,347 28,045
Goodwill 37,432 12,359 32,256
Property, plant and equipment 13,441 5,425 13,677
Deferred taxation - 282 -
Financial and other assets 88 95 85
-------------------------------- ---------------------- ---------- -------------
77,126 78,508 74,063
------------------------------- ---------------------- ---------- -------------
Current assets
Trade and other receivables 15,611 10,297 8,918
Cash and cash equivalents 336 468 1,132
15,947 10,765 10,050
------------------------------- ---------------------- ---------- -------------
Total assets 93,073 89,273 84,113
-------------------------------- ---------------------- ---------- -------------
Current liabilities
Bank overdraft 767 1,962 -
Trade and other payables 12,204 8,077 9,036
Deferred income 7,393 4,895 5,663
Taxation - 308 9
Finance lease obligations 507 1,129 764
Derivative financial - 559 -
instruments
Provisions 1,684 1,302 2,323
22,555 18,232 17,795
------------------------------- ---------------------- ---------- -------------
Non-current liabilities
Borrowings 8,175 3,500 5,411
Finance lease obligations 297 255 322
Deferred tax liabilities 6,199 12,127 6,503
Provisions 666 2,064 666
15,337 17,946 12,902
------------------------------- ---------------------- ---------- -------------
Total liabilities 37,892 36,178 30,697
-------------------------------- ---------------------- ---------- -------------
Net assets 55,181 53,095 53,416
-------------------------------- ---------------------- ---------- -------------
Equity attributable to
equity holders of the
parent
Called up share capital 5,018 4,773 4,773
Share premium account 35,439 32,191 32,684
Other reserves (128) (132) (130)
Retained earnings 14,852 16,263 16,089
-------------------------------- ---------------------- ---------- -------------
Total equity 55,181 53,095 53,416
-------------------------------- ---------------------- ---------- -------------
Consolidated Statement of Changes in Equity
Share Share Retained Foreign
capital premium earnings currency Total
translation
reserve
GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- --------- --------- ---------- ------------- --------
At 1 January
2016 1,780 - 19,437 (168) 21,049
Total comprehensive
income for the
period
Loss for the
period - - (3,207) - (3,207)
Exchange rate
differences - - - 36 36
Transactions
with owners recorded
directly in equity
Share issue,
net of issue
costs
Acquisition of
Selection 26,814 - - 29,314
Acquisition of
C4L 2,500 372 - - 406
Issue of warrants 34 5,504 - - 5,963
Share based payments 459 (499) - - (499)
- - 33 - 33
-
----------------------- --------- --------- ---------- ------------- --------
At 30 June 2016 4,773 32,191 16,263 (132) 53,095
Total comprehensive
income for the
period
Loss for the
period - - (232) - (232)
Exchange rate
differences - - - 2 2
Transactions
with owners recorded
directly in equity
Share issues
Share based payments - 493 - - 493
- - 58 - 58
----------------------- --------- --------- ---------- ------------- --------
At 31 December
2016 4,773 32,684 16,089 (130) 53,416
Total comprehensive
income for the
period
Loss for the
period - - (1,295) - (1,295)
Exchange rate
differences - - - 2 2
Transactions
with owners recorded
directly in equity
Acquisition of
365ITMS
Share based payments 245 2,755 - - 3,000
- - 58 - 58
----------------------- --------- --------- ---------- ------------- --------
At 30 June 2017 5,018 35,439 14,852 (128) 55,181
----------------------- --------- --------- ---------- ------------- --------
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
-------------------------------------- ------------ ------------ -------------
(Loss) for the period (1,295) (3,207) (3,439)
Adjustments for:
Depreciation of property,
plant and equipment 1,426 995 2,461
Amortisation of intangible
assets 1,955 1,753 3,079
Net financial costs 149 126 301
Equity settled share-based
payment expenses 58 33 91
Derivative financial - 60 -
instrument expenses
Taxation (306) (232) (658)
Gain on disposal of property,
plant and equipment - - 117
Other reserve movements 2 36 38
--------------------------------------- ------------ ------------ -------------
1,989 (436) 1,990
(Increase)/decrease in
trade and other receivables (6,693) (4,211) (3,559)
Increase/(decrease) in
trade and other payables 4,898 61 787
Decrease in provisions (639) (614) (1,496)
(445) (5,200) (2,278)
Net corporation tax (paid)/recovered (9) (30) (151)
Net cash from operating
activities (454) (5,230) (2,429)
--------------------------------------- ------------ ------------ -------------
Cash flow from investing
activities:
Interest received
Acquisition of 365ITMS, - 7 -
net of cash acquired (3,682) - -
Acquisition of Selection,
net of cash acquired - (34,233) (34,233)
Acquisition of C4L, net
of cash acquired - (14,291) (14,291)
Acquisition of plant
and equipment (1,190) (904) (2,601)
Acquisition of other
long term assets - - (17)
Proceeds from sale of - - -
property, plant and equipment
-------------------------------------- ------------ ------------ -------------
Net cash (used in)/from
investing activities (4,872) (49,421) (51,142)
--------------------------------------- ------------ ------------ -------------
Cash flows from financing
activities:
Share issue, net of share
issue costs 3,000 29,314 29,308
Proceeds from borrowings,
net of expenses 1,300 3,402 5,392
Repayment of loans and
other borrowings (125) (1,494) (1,494)
Repayment of finance
lease obligations (282) (684) (982)
Net Interest paid (130) (129) (290)
Acquisition of financial - (21) -
and other non-current
assets
-------------------------------------- ------------ ------------ -------------
Net cash from/(used in)
financing activities 3,763 30,388 31,934
--------------------------------------- ------------ ------------ -------------
Net (decrease)/increase
in cash and cash equivalents (1,563) (24,263) (21,637)
Cash and cash equivalents
at beginning of period 1,132 22,769 22,769
Cash and cash equivalents
at end of period (431) (1,494) 1,132
--------------------------------------- ------------ ------------ -------------
Notes to the half-yearly financial information
1. Basis of preparation
The condensed consolidated interim financial information for the
six month period ended 30 June 2017 and 30 June 2016 is unaudited.
This statement has not been reviewed by the Company's auditor. This
condensed consolidated interim financial information was approved
by the Board of Directors and authorised for issue on 12 September
2017. A copy of this half-yearly financial report is available on
the Company's website at www.coretx.com
The Company is a public limited liability company incorporated
and domiciled in Scotland. The address of its registered office is
24 Dublin Street, Edinburgh EH1 3PP. The Company is listed on the
AIM market of the London Stock Exchange.
CORETX and its subsidiaries have not applied IAS 34, 'Interim
Financial Reporting' as adopted by the European Union, which is not
mandatory for UK AIM listed companies, in the preparation of this
half-yearly financial report.
This condensed consolidated interim financial information for
the six month period ended 30 June 2017 therefore does not comply
with all the requirements of IAS 34, 'Interim Financial Reporting'
as adopted by the European Union. The consolidated interim
financial information should be read in conjunction with the annual
financial statements of the Company as at and for the year ended 31
December 2016, which were prepared in accordance with IFRS as
adopted by the European Union.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the year ended 31
December 2016 were approved by the Board of Directors on 4 April
2017 and delivered to the Registrar of Companies. The report of the
auditor was unqualified, did not contain an emphasis of matter
paragraph and did not contain a statement under section 498 (2) or
(3) of the Companies Act 2006.
Accounting policies
The accounting policies used in the preparation of the condensed
consolidated interim financial information for the six months ended
30 June 2017 are in accordance with the recognition and measurement
criteria of International Financial Reporting Standards ("IFRS") as
adopted by the European Union and are consistent with those that
will be adopted in the annual statutory financial statements for
the year ended 31 December 2017.
While the financial information included has been prepared in
accordance with the recognition and measurement criteria of IFRS,
as adopted by the European Union, these financial statements do not
contain sufficient information to comply with IFRSs.
The Group notes that IFRS15 Revenue from Contracts with
Customers is to be adopted for all accounting periods beginning on
or after 1 January 2018. At this time, it remains impractical to
provide a reasonable estimate in relation to the effect of IFRS 15
until a detailed review has been completed. During H2, the group
will perform a detailed analysis to assess the impact of any
changes to revenue recognition policies to the transfer of control
concept under IFRS 15. The Directors do not expect the revenue
recognised to be materially different to the revenue currently
reported.
Exceptional items
Items which are material because of their size or nature and
which are non-recurring are highlighted separately on the face of
the income statement. The separate reporting of exceptional items
helps provide a better picture of the Company's underlying
performance. Items which may be included within the exceptional
category include:
-- spend on the integration of significant acquisitions and the
other major restructuring programmes;
-- significant goodwill or other asset impairments; and
-- other particularly significant or unusual items.
Spend on integration is incurred by the Group when integrating
one trading business into another. The types of costs include
employment related costs of staff being made redundant as a
consequence of integration, due diligence costs, property costs
such as lease termination penalties and vacant property provisions,
third party advisor fees and rebranding costs.
Exceptional items are excluded from the headline profit measures
used by the Group and are highlighted separately in the income
statement as management believe that they need to be considered
separately to gain an understanding the underlying profitability of
the trading businesses.
For further details, please refer to note 4.
Going concern
The condensed consolidated interim financial information has
been prepared on a going concern basis.
The Directors have prepared cash flow forecasts for the Group
following its acquisition of 365ITMS Limited, including sensitivity
analysis on key assumptions. These forecasts show that the Group
expects to meet its liabilities from cash resources, taking into
account all risks and uncertainties.
As a result, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason, the
Directors consider that the adoption of the going concern basis is
appropriate.
2. Business combinations
365 ITMS
On 5 April 2017, the Company acquired the entire issued share
capital of 365 ITMS Limited and its subsidiary entities
("365ITMS"), a United Kingdom based IT support and services
provider, with over 400 active customers. The enterprise value of
365ITMS was GBP5.4 million, paid as GBP0.9 million in cash (net),
GBP3.0 million in new ordinary shares in the Company at a price of
30.5p and the assumption of a GBP1.5m debt facility.
The Directors' assessment of the assets acquired and liabilities
assumed have not been completed at the time of these interim
results. The Directors have allocated provisional fair values in
preparing these results.
From the date of acquisition to 30 June 2017, 365ITMS recorded
revenue of GBP3.1 million and a loss before tax of GBP7k. Assuming
the combination had taken place at the beginning of the year, the
interim reported revenue from 365ITMS would have been GBP7.0
million and the loss before taxation would have been GBP59k.
Acquisition costs were GBP0.3 million.
The total provisional goodwill and intangible assets arising
from the acquisition is the difference between the fair value of
the consideration less the provisional value of the assets
acquired.
365 ITMS
Provisional value GBP000
------------------------------ ---------
Fair value of purchase
consideration 5,400
Less fair value of assets
acquired:
Property plant and equipment (303)
Trade receivables (3,087)
Other debtors (1,612)
Cash (1,003)
Trade payables 1,505
Other liabilities 6,787
--------------------------------- ---------
Goodwill and intangibles 7,687
--------------------------------- ---------
The consideration was Total
satisfied as follows:
GBP000
------------------------------- --- --- --- --------
Cash on completion 1,600
Equity 3,000
Total consideration 4,600
Assumption of debt 1,500
Less: cash balances acquired (700)
---------------------------------------------- --------
Enterprise value 5,400
---------------------------------------------- --------
The Directors have provisionally assessed the business acquired
to identify any intangible assets. Customer contracts and the 5i
trademark for channel business meet the criteria for recognition as
intangible assets, as they are separable from each other and have a
measurable fair value, being the amount for which an asset would be
exchanged between knowledgeable and willing parties in an arm's
length transaction. Goodwill was identified following the
recognition of deferred tax liabilities on the customer contracts
and trademark brand, under the provisions of IAS 12, 'Income
Taxes'.
For customer contracts, the fair value of the intangible assets
was provisionally calculated using the discounted cash flows
arising from the top 30 direct customer contract base. Customer
retention was assumed to be 90% based on past experience.
For the 5i trademark, the fair value of the intangible assets
was provisionally calculated using the discounted cash flows
arising from the channel business. Channel partner retention was
assumed to be 80% based on past experience.
3. Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting to the Chief Operating Decision Maker ("CODM").
The CODM has been identified as the Group Chief Executive and the
Chief Financial Officer.
The Group Chief Executive and the Chief Financial Officer are
jointly responsible for resource allocation and assessing the
performance of the operating segments. The operating segments are
defined by distinctly separate product offerings or markets. The
CODMs assesses the performance of the operating segments based on a
measure of revenue and gross profit.
The following table presents revenue and gross profit in respect
of the Group's operating segment for the six months ended 30 June
2017:
Unaudited for the six month period ended 30 June 2017
Continuing operations Managed Services Cloud Hosting Networks Projects Central Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Revenue 10,265 5,529 6,079 7,719 - 29,592
Cost of Sales (6,592) (3,085) (3,707) (4,929) - (18,313)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Gross profit/(loss) 3,672 2,444 2,372 2,790 - 11,279
Administrative expenses - - - - (12,730) (12,730)
Operating profit/(loss) 3,672 2,444 2,372 2,790 (12,730) (1,451)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Analysed as:
Adjusted EBITDA* 3,672 2,444 2,372 2,790 (8,845) 2,433
Equity settled share-based payments - - - - (57) (57)
Depreciation - - - - (1,426) (1,426)
Amortisation of intangible assets - - - - (1,955) (1,955)
Exceptional costs - - - - (447) (447)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Net financial costs - - - - (149) (149)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Profit/(loss) before taxation 3,672 2,444 2,372 2,790 (12,879) (1,601)
Tax on profit/(loss) on ordinary
activities - - - - 306 306
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Profit/(loss) for the period after
taxation 3,672 2,444 2,372 2,730 (12,573) (1,295)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Unaudited for the six month period ended 30 June 2016
Continuing operations Managed Services Cloud Hosting Networks Projects Central Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Revenue 6,872 5,055 4,316 2,956 - 19,199
Cost of Sales (3,852) (2,352) (3,007) (1,940) - (11,151)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Gross profit/(loss) 3,020 2,703 1,309 1,016 - 8,048
Administrative expenses - - - - (11,361) (11,361)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Operating profit/(loss) 3,020 2,703 1,309 1,016 (11,361) (3,313)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Analysed as:
Adjusted EBITDA* 3,020 2,703 1,309 1,016 (6,419) 1,629
Equity settled share-based payments - - - - (33) (33)
Increase in derivative financial
instruments - - - - (60) (60)
Depreciation - - - - (995) (995)
Amortisation of intangible assets - - - - (1,753) (1,753)
Exceptional costs - - - - (2,101) (2,101)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Net financial costs - - - - (126) (126)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Profit/(loss) before taxation 3,020 2,703 1,309 1,016 (11,487) (3,439)
Tax on profit/(loss) on ordinary
activities - - - - 232 232
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
Profit/(loss) for the period after
taxation 3,020 2,703 1,309 1,016 (11,190) (3,142)
--------------------------------------- ----------------- -------------- --------- --------- --------- ---------
* Earnings from continuing operations before interest, tax,
depreciation, amortisation, goodwill impairment, share based
payments, increase in derivative financial instruments and
exceptional costs
Administrative expenses are not allocated against operating
segments in the Company's internal reporting. The statement of
financial position is not allocated between Managed Services, Cloud
Hosting, Networks, Projects and Central in the Company's internal
reporting.
4. Exceptional costs
In accordance with the Group's policy in respect of exceptional
costs, the following charges were incurred:
Unaudited Unaudited Audited
Six Six months Year
months ended ended
ended 30 June 31 December
30 June 2016 2016
2017
GBP000 GBP000 GBP000
---------------------------------- ---------- ------------ -------------
Restructuring and reorganisation
costs 182 1,207 2,056
Acquisition costs 265 894 894
447 2,101 2,950
---------------------------------- ---------- ------------ -------------
Continuing operations 447 2,036 2,885
Discontinued operations - 65 65
-------------------------- ---- ------ ------
447 2,101 2,950
------------------------- ---- ------ ------
5. Earnings per share
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
------------------------------ -------------- ------------ -------------
(Loss) for the period (1,295) (3,207) (3,439)
Addback:
Net financial costs/(income) 149 126 301
Taxation (306) (232) (658)
Equity settled share-based
payment expenses 57 33 91
Loss on disposal of
property, plant & equipment - 60 117
Depreciation of property,
plant and equipment 1,426 995 2,461
Amortisation of intangible
assets 1,955 1,753 3,079
Exceptional costs 447 2,101 2,950
------------------------------- -------------- ------------ -------------
Adjusted EBITDA* 2,433 1,629 4,902
------------------------------- -------------- ------------ -------------
30 June 30 June 31 December
2017 2016 2016
------------------------------ -------------- ------------ -------------
Weighted average number
of shares 195,599,956 175,228,614 183,108,493
Diluted weighted average
number of shares 209,076,787 185,585,058 194,909,006
------------------------------- -------------- ------------ -------------
Basic (loss)/earnings
per share (pence) (0.66) (1.83) (1.88)
Diluted (loss)/earnings
per share (pence) (0.66) (1.83) (1.88)
Basic adjusted EBITDA*
per share (pence) 1.24 0.93 2.68
Diluted adjusted EBITDA*
per share (pence) 1.16 0.88 2.52
------------------------------- -------------- ------------ -------------
* Earnings from continuing operations before interest, tax,
depreciation, amortisation, goodwill impairment, share based
payments, increase in derivative in financial instruments and
exceptional costs
The measure of EBITDA per share, as calculated above, is a
non-statutory measure, which we believe is useful to investors and
is commonly used by the market in monitoring similar
businesses.
6. Subsequent events
On 11 July 2017, the UK Intellectual Property Enterprise Court
("IPEC") ruled that the CORETX brand infringed a pre-existing mark.
At a hearing of IPEC on 31 July, the Company informed IPEC of its
intention to seek permission from the Court of Appeal to appeal
against the judgement. The Directors do not expect this to have an
impact on this or future years' expectations.
On 31 July 2017, MXC Capital Markets LLP ("MXC") resigned as
Financial Adviser to the Company, as the Company is now well
positioned to become a leading provider of Cloud and Managed IT
Services to the UK mid-market. Andy Ross, CEO, has also, by mutual
consent, stepped down from his position as an operating partner at
MXC to concentrate solely on his role in the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DBLFLDKFLBBD
(END) Dow Jones Newswires
September 21, 2017 02:00 ET (06:00 GMT)
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