TIDMITIM
RNS Number : 0495A
itim Group PLC
21 September 2022
21 September 2022
itim Group plc
("itim" or the "Company and with its subsidiaries the
Group")
Interim Results for the six months ended 30 June 2022
itim Group plc (AIM:ITIM) a SaaS based technology company that
enables store based retailers to optimise their businesses to
improve financial performance, is pleased to announce its unaudited
interim results for the 6 months ended 30 June 2022.
Financial Highlights
-- Group revenues of GBP6.8m ( Half Year 2021 ("HY21"):
GBP6.4m, Full Year 2021("FY21"): GBP13.5m)
-- Booked Recurring Revenue GBP5.6m (HY21: GBP4.9m, FY21:
GBP10.3m)
-- Recurring revenue percentage of Group revenue 82% (HY21:
77%, FY21: 77%)
-- Annual recurring revenue ("ARR") GBP12.6m (HY21: GBP10.6m,
FY21: GBP11.1m)
-- Annual growth in ARR is 19% (HY21: GBP10%, FY21: 16%)
-- Adjusted EBITDA(1) GBP0.3m (HY21: GBP1.2m, FY21: GBP2.2m)
-- Adjusted EBITDA(1) margin 5% (HY21: 19%, FY21: 17%)
-- (Loss)/profit before tax (GBP0.4)m (HY21: (GBP0.1)m,
FY21: GBP0.2m)
-- Cash at GBP5.3m (HY21: GBP9.6m, FY21: GBP6.2m)
-- Earnings per share (1.20) pence, (HY21: (0.20) pence,
FY21: 0.88 pence)
-- Adjusted Earnings per share(2) (1.06) pence (HY21: 2.59
pence, FY21: 3.75 pence)
Full year numbers quoted above are audited and half year numbers
quoted above are unaudited.
1. EBITDA has been adjusted to exclude share-based payment
charges, exceptional items, along with depreciation, amortisation,
interest and tax from the measure of profit.
2. The profit measure has been adjusted to exclude exceptional
items and share option charge
Ali Athar, CEO of itim Group plc, said: "We have continued to
invest significant sums in product development and ensuring that we
have the resources to deliver a first rate service to our growing,
high quality customer base. In these testing economic times, I see
the deployment of itim's products and services as being vital in
helping clients weather the storm. I am optimistic that itim is
well placed to respond to the challenges presented in the year
ahead".
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014,
which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of
this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
Enquiries:
Ali Athar, CEO
Itim Group plc Ian Hayes CFO 0207 598 7700
Katy Mitchell
WH Ireland (NOMAD & Harry Ansell
Broker) Darshan Patel 0207 220 1666
Graham Herring
IFC Advisory Florence Chandler 020 3934 6630
ABOUT ITIM
itim was established in 1993 by its founder, and current Chief
Executive Officer, Ali Athar. itim was initially formed as a
consulting business, helping retailers effect operational
improvement. From 1999 the Company began to expand into the
provision of proprietary software solutions and by 2004 the Company
was focused exclusively on digital technology. itim has grown both
organically and through a series of acquisitions of small, legacy
retail software systems and associated applications which itim has
redeveloped to create a fully integrated end to end Omni-channel
platform.
CEO Statement
I am pleased to report that the period ended 30 June 2022 was
one of steady growth in sales and recurring revenues. Revenue for
the 6 month period was GBP6.8m (HY21: GBP6.4m) an increase of 6%,
of which recurring revenues were GBP5.6m (HY21: GBP4.9m)
representing 82% of sales and underpinning future sales. Adjusted
EBITDA (EBITDA excluding share-based payment charges and
exceptional items) fell to GBP0.3m (HY21: GBP1.2m) mainly due to
increases in headcount as we build capability ahead of new projects
and increase staff resilience. Consequently, EBITDA margin fell in
line with this investment to 5% (HY21: 19%). The results also
reflect the increase in associated public company costs following
our admission to AIM in June 2021. Cash balances totalled GBP5.3m
at the period end (FY21: 6.2m) the change reflecting the
significant investments we have made in asset purchases and product
development needed to underpin future growth. Adjusted loss per
share was 1.2p (HY21: loss 2.59p).
Sales
As we reported in previous statements, itim has steadily widened
its product offering to its client base with the aim of creating
deeper relationships. As the number and depth of our customer
relationships grow, so does our knowledge and insight into the
retail industry. We look to use this knowledge to further enhance
our products and client service.
During the interim period under review our client base continued
to grow and our proportion of revenues which are recurring will
continue to increase.
Costs
Costs have increased significantly in the period to support
growth. As noted in the highlights above, we have invested heavily
in new headcount in the past 12 months, with 27 new staff appointed
in the 12 month period from 1(st) July 2021 to 30(th) June 2022 of
which 13 were added in the period under review. Additionally, pay
rises were awarded to existing staff in line with inflation. The
objective of this investment is to build the required capability
ahead of potential new subscription sales and to increase staff
capacity to cover busy periods. We have also invested circa GBP100k
in new security software products for our hosting centre.
Public company costs also increased compared to the same period
in 2021 due to the costs of being an AIM quoted company - these are
mainly additional board costs and professional advisory fees.
Trading background
The economic predictions for the next 12 months (and beyond)
make for quite negative reading and we can expect there to be an
impact on the retail sector and our customers. Notwithstanding
this, I am confident that itim's technology is designed to help
retailers weather this storm in a range of critical areas and
accordingly, we are well placed to weather the storm alongside
them.
Key areas for our software include:
Price and Promotions Optimisation. In the current environment
retailers may be tempted to run promotions to drive up sales and
sell through inventory, on the other hand retailers may be forced
to increase prices to recover costs. By being more strategic
retailers could maximise cash margin without damaging competitive
positioning. itim successfully works with over 30 retailers
globally on price and promotions optimisation with our industry
leading software.
Digital Supplier Collaboration. Retailers can deliver cost
savings by closer collaboration across their trading relationships.
There are many areas of opportunity such as consignment stock
models, drop shipment, reducing payment costs, improved supplier
debits, data collection and reduced administration, itim has a
digital hub that can deliver this.
Stock Optimisation. For the last 10 years, we believe low
interest rates, have allowed retailers to be more casual about
stock holdings. We believe this is because excess stock may appear
to be a good hedge against inflation, but it also ties up cash. We
now know from our customers that the P&L impact of excess stock
is about 11% of the cost of the stock (in terms of stock handling
and distribution costs across the retail network). itim has
expertise and experience in helping reduce stocks, including
helping move stock holdings back up the supply chain.
Home Delivery Charges. itim can reduce cost of delivery, as
despatch from store is now often cheaper than despatch from central
warehouses. Our research suggests most national retailers'
customers live within 15 minutes from their stores. We have
demonstrated improvements in profit for our customers from this
simple shift. We believe itim's 'shop local' business model
combined with a delivery route manager for local deliveries is
proving to be a success with our clients.
The Directors believe it is our job is to ensure these messages
are clearly understood by our existing and potential clients and
that we have the resources to deliver services to support them as
needed. This is why we have invested heavily in headcount and
product development since our IPO and have been prepared to do this
despite a short term impact on profits.
Against this background, notwithstanding some near term contract
delays, I am optimistic that itim is well placed to respond to the
challenges presented in the year ahead.
People
As always I am indebted to all of our staff for the enormous
effort and skill that they deploy every day for itim and our
clients.
Outlook
I remain confident that we will continue to see a continued
uplift in revenues, particularly in meeting our objectives related
to growth of ARR. However, we remain mindful of the economic
challenges facing all companies in the next twelve months and look
to the future with cautious optimism.
Ali Athar
Chief Executive Officer
20(th) September 2022
Consolidated Statement of Comprehensive Income
for the half-year ended 30 June 2022
Six month Six month Year ended
period ended period ended 31 December
30 June 30 June 2021
2022 2021
Unaudited Unaudited Audited
Notes GBP000 GBP000 GBP000
Continuing operations
Revenue 6,784 6,366 13,474
Cost of sales (4,588) (3,704) (7,953)
-------------- -------------- ---------------------
Gross profit 2,196 2,662 5,521
Administrative expenses (1,860) (1,433) (3,297)
-------------- -------------- ---------------------
EBITDA 336 1,229 2,224
Amortisation of intangible
assets (443) (378) (746)
Share option charge (45) (91) (151)
Depreciation (20) (17) (38)
Depreciation of leased assets (184) (122) (297)
Loss on disposal of right-of-use
assets - - 10
-------------- -------------- ---------------------
(Loss)/Profit from operations (356) 621 1,002
Finance costs - (48) (67)
Other interest - right of
use assets (21) (51) (42)
Exceptional items - (630) (667)
(Loss)/Profit before taxation (377) (108) 226
Taxation 2 56 26
-------------- -------------- ---------------------
(Loss)/Profit for the period/year (375) (52) 252
Other comprehensive income
Exchange differences on retranslation
of foreign operations 51 (74) (119)
Total comprehensive income
for the period/year net of
tax (324) (126) 133
============== ============== =====================
Earnings per share
Basic 2 (1.20p) (0.20p) 0.88p
Diluted 2 (1.20p) (0.20p) 0.78p
-------------- -------------- ---------------------
Consolidated Statement of Financial Position
as at 30 June 2022
As at As at As at
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Non-current assets
Intangible assets 9,233 8,391 8,733
Plant and equipment 508 54 280
Right-of-use assets 581 795 649
Deferred tax 4 205 65
---------- ---------- -------------
10,326 9,445 9,727
Current assets
Trade and other receivables 3,512 3,361 3,702
Cash and cash equivalents 5,295 9,567 6,172
---------- ---------- -------------
8,807 12,928 9,874
Total assets 19,133 22,373 19,601
---------- ---------- -------------
Current liabilities
Trade and other payables (4,866) (4,613) (5,218)
Right-of-use liability (288) (297) (290)
(5,154) (4,910) (5,508)
Non-current liabilities
Trade and other payables due
in more than one year (355) (3,727) (176)
Right-of-use liability (359) (578) (434)
Deferred tax (563) (496) (502)
(1,277) (4,801) (1,112)
Total liabilities (6,431) (9,711) (6,620)
---------- ---------- -------------
Net Assets 12,702 12,662 12,981
========== ========== =============
Capital and reserves
Called up share capital 1,561 1,561 1,561
Share premium account 7,398 7,398 7,398
Share options reserve 500 395 455
Capital redemption reserve 1,103 1,103 1,103
Foreign exchange reserve 77 71 26
Retained profit/(loss) 2,063 2,134 2,438
---------- ---------- -------------
Shareholders' funds 12,702 12,662 12,981
========== ========== =============
Consolidated Statement of Cash Flow
for the half-year ended 30 June 2022
Six month Six month Year ended
period ended period ended 31 December
30 June 30 June 2021
2022 2021
Unaudited Unaudited Audited
Notes GBP000 GBP000 GBP000
Cash flows from operating
activities
Profit after taxation (375) (52) 252
Adjustments for:
Taxation (3) (56) (26)
Finance costs - 48 67
Share option charge 45 91 151
Other interest on leases 21 51 42
Exchange gain/ (loss) - (73) -
Amortisation and depreciation 647 517 1,081
Exceptional - IPO costs - 630 667
(Profit)/Loss on disposal
of right of use asset - - (10)
-------------- -------------- -------------
Cash flows from operations
before working capital changes 335 1,156 2,224
Movement in trade and other
receivables 337 275 (354)
Movement in trade and other
payables (383) 43 335
-------------- -------------- -------------
Cash generated from operations 289 1,474 2,205
Finance costs - (48) (4)
Corporation tax (42) - 543
-------------- -------------- -------------
Net cash flow from operating
activities 247 1,426 2,744
Cash flow from investing
activities
Capital expenditure on intangible
assets (907) (619) (1,361)
Purchase of plant and equipment (28) (7) (49)
Proceeds from shares issued
- IPO - 8,000 8,000
Proceeds from share option
conversion - 181 181
IPO expenses - (1,129) (1,165)
Net cash flow from investing
activities (935) 6,426 5,606
Cash flow from financing
activities
Loan repayments - (284) (3,659)
Interest repayments - - (98)
Payment of lease liabilities (194) (128) (335)
Loan issued - - (210)
Net cash flow from financing
activities (194) (412) (4,302)
Net (decrease)/increase in
cash and cash equivalents (882) 7,440 4,048
============== ============== =============
Cash and cash equivalents
at beginning of year 6,172 2,127 2,127
Exchange gains/(losses) on
cash and cash equivalents 5 - (3)
Cash and cash equivalents
at end of year 5,295 9,567 6,172
============== ============== =============
Consolidated Statement of Changes in Equity
as at 30 June 2022
Share Share Share Capital Foreign Retained Total
capital Premium option Redemption exchange Earnings Equity
reserve Reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2022 1,561 7,398 455 1,103 26 2,438 12,981
Comprehensive income
for the year - - - - (375) (375)
Foreign exchange
movement - - - 51 - 51
--------- --------- --------- ------------ ---------- ---------- --------
Total comprehensive
income - - - 51 (375) (324)
Share option charge - - 45 - - - 45
--------- --------- --------- ------------ ---------- ---------- --------
At 30 June 2022
(unaudited) 1,561 7,398 500 1,103 77 2,063 12,702
========= ========= ========= ============ ========== ========== ========
At 1 January 2021 2,379 10,469 304 - 145 (8,283) 5,014
Comprehensive income
for the year - - - - - (52) (52)
Foreign exchange
movement - - - - (74) - (74)
--------- --------- --------- ------------ ---------- ---------- --------
Total comprehensive
income - - - - (74) (52) (126)
Share option charge - - 91 - - - 91
Share buyback of
deferred shares (1,103) - - 1,103 - - -
Cancellation of
share premium (10,469) 10,469 -
Shares issued in
the period - IPO 260 7,740 - - - - 8,000
Share option conversion 25 156 - - - - 181
IPO expenses (498) (498)
At 30 June 2021
(unaudited) 1,561 7,398 395 1,103 71 2,134 12,662
========= ========= ========= ============ ========== ========== ========
At 1 January 2021 2,379 10,469 304 - 145 (8,283) 5,014
Comprehensive income
for the year - - - - - 252 252
Foreign exchange
movement - - - - (119) - (119)
--------- --------- --------- ------------ ---------- ---------- --------
Total comprehensive
income - - - (119) 252 133
Share option charge - - 151 - - - 151
Share buyback of
deferred shares (1,103) - - 1,103 - - -
Cancellation of
share premium - (10,469) - - - 10,469 -
Shares issued in
the period - IPO 260 7,740 - - - - 8,000
Share option conversion 25 156 - - - - 181
IPO expenses - (498) - - - - (498)
At 31 December
2021 (audited) 1,561 7,398 455 1,103 26 2,438 12,981
========= ========= ========= ============ ========== ========== ========
Notes to the Financial Information
1. General information
itim Group plc is a public limited Company ("Company")
incorporated in the United Kingdom under the Companies Act 2006
(registration number 03486926). The Company is domiciled in the
United Kingdom and its registered address is 2(nd) Floor, Atlas
House, 173 Victoria Street, London SW1E 5NH. The Company's ordinary
shares are admitted to trading on AIM, a market of the London Stock
Exchange ("AIM").
The Group's principal activities have been the provision of
technology solutions to help clients drive improvements in
efficiency and effectiveness.
The Group's interim report and accounts for the six months ended
30 June 2022 have been prepared using the recognition and
measurement principles of International Financial Reporting
Standards and Interpretations as endorsed by the European Union
(collectively "Adopted IFRS").
These interim financial statements for the six months ended 30
June 2022 have been prepared in accordance with the AIM Rules for
Companies and should be read in conjunction with the financial
statements for the year ended 31 December 2021, which have been
prepared in accordance with IFRS as adopted by the European Union.
The interim report and accounts do not include all the information
and disclosures required in the annual financial statements.
The interim report and accounts have been prepared on the basis
of the accounting policies, presentation and methods of computation
as set out in the Group's December 2021 Annual Report and Accounts,
except for those that relate to new standards and interpretations
effective for the first time for periods beginning on (or after) 1
January 2022, and will be adopted in the 2022 annual financial
statements.
The interim report and accounts do not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. These interim financial statements were approved by the Board
of Directors on 20th September 2022. The results for the six months
to 30 June 2022 and the comparative results for the six months to
30 June 2021 are unaudited. The figures for the period ended 31
December 2021 are extracted from the audited statutory accounts of
the Group for that period.
The Directors believe that a combination of the Group's current
cash, projected revenues from existing and future contracts will
enable the Group to meet its obligations and to implement its
business plan in full. Inherently, there can be no certainty in
these matters, but the Directors believe that the Group's internal
trading forecasts are realistic and that the going concern basis of
preparation continues to be appropriate.
2. Earnings per share
Basic and diluted (loss)/earning per share is calculated by
dividing the (loss)/profit attributable to owners of the parent by
the weighted average number of ordinary shares in issue during the
period. For the avoidance of doubt the deferred shares have been
excluded as they have no rights to profits or capital. The
Company's share options have a dilutive effect over the two year
period.
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit after tax for the year (375) (52) 252
------------------------------------------ ------------ ------------ --------------
Exceptional items - 630 667
Share option charge 45 91 151
------------------------------------------ ------------ ------------ --------------
Adjusted Profit after tax for the year (330) 669 1,070
Weighted average number of shares
------------------------------------------ ------------ ------------ --------------
Basic - 000 31,211 25,817 28,536
Potentially dilutive share options -
000 3,657 3,679 3,668
Diluted average number of shares - 000 34,868 29,496 32,204
Earnings per share:
------------------------------------------ ------------ ------------ --------------
Basic - pence on continuing operations (1.20) (0.20) 0.88
Diluted - pence on continuing operations (1.20) (0.20) 0.78
Adjusted earnings - Basic - pence on
continuing operations (1.06) 2.59 3.75
Adjusted earnings - Diluted - pence
on continuing operations (1.06) 2.27 3.32
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