TIDMMMX
RNS Number : 1202N
Minds + Machines Group Limited
27 September 2021
For immediate release
An amendment has been made to RNS announcement number 9766M
released on 27 September 2021 at 07:00.
The Company's contact details have been amended to state:
Minds + Machines Group Limited
Tony Farrow (CEO) via Belvedere Communications
Bryan Disher (CFO)
For further information, please go
to www.mmx.co
All other details remain unchanged.
The full amended text is shown below.
Minds + Machines Group Limited
("MMX" or the "Company")
Interim Results
Minds + Machines Group Limited (AIM: MMX), formerly one of the
world's leading owners and operators of Internet Top-Level Domains
("TLDs"), is pleased to announce the Group's unaudited interim
results for the six-month period ended 30 June 2021 ("the
period").
Financial Highlights
-- Signing and shareholder approval of agreement to sell the
majority of the Group's Registry Business to Registry Services, LLC
("GoDaddy Registry"), an affiliate of GoDaddy Inc., for $120
million plus adjustments for working capital that transferred with
certain subsidiaries. The sale was completed effective 11 August
2021.
-- Decision by the Directors to also exit the Group's registry
service provider ("RSP") business following the completion of the
sale of the Registry Business.
-- Loss from continuing operations (i.e. administrative and
public company costs left behind after sale or wind down of the
Registry and RSP businesses) of $783k (H1 2020: loss of
$1,251k).
-- Profit from discontinued operations (i.e. Registry and RSP
businesses) of $3,381K (H1 2020: profit of $2,681k).
-- EPS from continuing and discontinued operations of $0.30 (H1 2020: $0.16).
-- Cash at 30 June 2020 of $10.4m compared to $8.9m at 31 December 2020.
-- Announcement on 11 September 2021 of a tender offer to
purchase up to 604,166,667 ordinary shares of the Company at a
price of 9.6 pence (approximately $0.13) per ordinary share to
return up to $80 million of cash to shareholders. This tender offer
is expected to be completed in early October 2021
Commenting on Current Trading and Outlook, Tony Farrow, CEO
said:
"We are pleased that during the period, while negotiating and
ultimately completing the sale of our Registry Business, our people
remained focused and delivered improved cash flows that capitalised
on the changes we made at the end of 2020. The result is additional
cash that, combined with the Registry Business sale proceeds, is
enabling us to return material cash to shareholders through our
previously announced tender offer.
"We are now in the process of delivering the transition services
agreed with GoDaddy Registry and disposing of, or otherwise winding
down, our RSP Business. Whilst the transition services are being
provided on a cost recovery basis, the Company's ongoing
administrative and other public company costs will result in
operating losses for the Group going forward.
"I would like to thank all the Group's employees who worked so
hard to make the Registry Business sale possible and continued to
generate improved operating cash flows right up to the completion
date. We look forward to their continued support through the
transition services period and wish them well in their subsequent
transitions into new opportunities."
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
-S-
Further Information:
Minds + Machines Group Limited
Tony Farrow (CEO) via Belvedere Communications
Bryan Disher (CFO) Limited
finnCap Ltd Tel: +44 (0) 20 7220
0500
Corporate finance - Stuart Andrews
/ Carl Holmes / Simon Hicks
Corporate broking - Tim Redfern /
Richard Chambers
Belvedere Communications Limited Tel: +44 (0) 20 3687
John West 2756
Llew Angus
For further information, please go to www.mmx.co
Executive Summary for the period ended 30 June 2020
H1 2021 review
Sale of the Group's Registry Business
On 7 April 2021, the Company entered into an asset purchase
agreement whereby GoDaddy Registry agreed to acquire substantially
all the Group's Registry Business for cash of $120 million, plus
adjustments for working capital that transferred with certain
subsidiaries. The sale was approved by the Company's shareholders
on 23 April 2021 and completed effective 11 August 2021.
Approximately $13.3 million of the sale proceeds are held in escrow
until 31 March 2022.
As a result, the Group can no longer be considered a going
concern for financial reporting purposes and the financial
information has therefore been prepared on a basis other than going
concern. However, the Directors have a reasonable expectation that
the Group has adequate resources to meet its obligations as they
fall due for a period of at least 12 months from the date of
signing these financial statements.
Transition services
To facilitate a smooth transition of the Group's Registry
Business, the Group is providing certain transition services to
GoDaddy Registry. The transition services consist of maintaining
technology infrastructure and registry platforms, customer support
to Registrars, back-office support services (including billing,
cash-collection and accounting), legal support, and channel sales
and marketing support.
GoDaddy Registry will cover the costs incurred in providing
these services, including the cost of the relevant employees.
Beyond transition services
In H1 2021, the Directors also determined that the Group would
exit its registry service provider ("RSP") business following the
completion of the sale of the Registry Business. On 31 August 2021
the Group's contract to provide RSP services to the .london gTLD
ended and management is now in the process of disposing of or
winding down the Group's remaining RSP Business, which consists of
back-office registry services for three gTLDs, disposing of its
interest in three other gTLDs, and dissolving its subsidiaries.
At the end of the transition services period the Company will be
classified as a Rule 15 cash shell in accordance with the AIM
Rules. As an AIM Rule 15 cash shell the Company will be required to
make an acquisition or acquisitions which constitute a reverse
takeover under AIM Rule 14 (or seek re-admission as an investing
company as defined under the AIM Rules), on or before 31 July 2022,
failing which the Company's ordinary shares will be suspended from
trading on AIM, pursuant to AIM Rule 40.
Distribution of the Group's assets
Following the completion of the sale of the Registry Business,
the Group has approximately $105 million in net assets, consisting
principally of cash, plus the cash held in escrow. The Directors
determined that $25 million of the cash, not including the escrowed
amount, should be retained by the Group until at least Q1 of 2022
to provide for ongoing working capital needs, contract and employee
termination costs, and to minimize taxes that would otherwise be
payable on distribution. On 11 September 2021 the Company announced
a tender offer to purchase up to 604,166,667 ordinary shares of the
Company at a price of 9.6 pence (approximately $0.13) per ordinary
share to return up to $80 million of cash to shareholders. This
tender offer is expected to be completed in early October 2021.
Following completion of the tender offer, the Board will
continue to consider the best ways to maximise shareholder value.
As part of this it will look to returning further cash to
shareholders and alternative acquisitions as provided under the AIM
Rules.
Financial review
As the Directors had determined during the period that the
Group's businesses would be sold or discontinued, the Group's
Registry Business and RSP Business are reported in H1 2021 as
discontinued and associated assets and liabilities are reported as
held for sale. The continuing operations of the Group consist of
the transition services, which did not commence until H2 2021, and
continuing administrative and public company costs.
H1 2021 H1 2020
(unaudited) (unaudited)
$ 000's $ 000's
--------------------------------------- ------------ ------------
Salaries and contractors 380 296
======================================= ============ ============
Share-based compensation 123 299
======================================= ============ ============
IT and software 21 20
======================================= ============ ============
Administrative expenses 500 384
======================================= ============ ============
Foreign exchange (gain) / loss (297) 190
======================================= ============ ============
General administrative expenses 727 1,189
======================================= ============ ============
Depreciation, amortisation and finance
costs 51 62
======================================= ============ ============
Profit (loss) before taxation (778) (1,251)
======================================= ============ ============
Income taxes 5 1
======================================= ============ ============
Profit (loss) from continuing
operations (783) (1,252)
======================================= ============ ============
Profit from discontinued
operations 3,381 2,681
======================================= ============ ============
Profit for period 2,598 1,429
======================================= ============ ============
General administrative expenses include the costs of finance
staff and corporate administrative costs such as professional fees,
insurance and PLC costs. They have remained relatively unchanged
except that the Group realised a foreign exchange gain in H1 2021
as compared to a foreign exchange loss in H1 2020.
The discontinued operations generated net earnings of $3,381k in
H1 2021 compared to $2,681k from the same businesses in H1 2020, an
improvement of 26%, even after providing for severance and other
employee termination costs in 2021. Earnings Before Interest,
Taxes, Depreciation, and Amortisation ("EBITDA") from discontinued
operations was $3,822k in H1 2021 compared to $3,190k from the same
businesses in H1 2020, an increase of 20%. Salary and contractor
costs in H1 2021 were reduced 58% to $799k from $1,886k in H1 2020,
a reflection of the reduction in the Company's staff from 23 at the
start of 2020 to 16 at the end of 2020. As most of these reductions
occurred in the 2(nd) half of 2020, the savings are now being
realised.
Discontinued operations includes $982k of accrued employee
severance and retention payments. During the period all employees
were given notice of the Company's intent to terminate their
employment subject to the completion of the sale of the Registry
Business and retention payments, including the buy back of vested
options and Restricted Share Units ("RSUs"), were offered to those
committing through to the end of the transition services period.
The Group also incurred $425k of costs in its discontinued
operations to settle a previous contractor dispute.
Earnings per share, including discontinued operations, was $0.30
per share in H1 2020, compared to $0.16 per share for the
comparable period in 2020. Loss per share from continuing
operations was $0.09 (H1 2020 - $0.13 per share).
Balance sheet
The key change in the balance sheet is that the assets and
liabilities related to the Registry and RSP businesses have been
classified as held for sale and are presented as single lines in
current assets and liabilities. Net assets increased to $78,238k in
H1 2021 compared to $75,969k at the end of 2020 mainly as the
result of the net cash generated by continuing and discontinued
operations in the period.
The gain on the sale of the Registry Business will not be
recognised until the second half of the year.
Cash
Cash generated from operating activities was $1,872k in H1 2021
compared to $2,235k in H1 2020. H1 2021 operating cash flows are
net of the $1 million settlement announced on 25 January 2021
relating to the 2018 acquisition of ICM Registry, LLC by the
Company.
Cash balances as at H1 2021 were $10,419k compared to $8,904k at
the end of 2020. The increase in cash reflects the $1,872k
generated from operations, proceeds from the sale of .country,
$645k in lease payments (mainly for back-end service contracts) and
$233k used to buy back shares in the open market and to repurchase
vested employee options and RSUs.
Current trading and outlook
The Group continued to generate positive cash flows from its
discontinued operations through to the completion of the sale of
the Group's Registry Business. The transition services to GoDaddy
Registry will be provided on a cost recovery basis. The Group's
other administrative and public company costs will result in
operating losses for the Group going forward.
The Directors expect to make further announcements with respect
to shareholder distributions and/or utilisation of the cash shell
in due course.
The Directors wish to thank all of the Group's employees who
worked so hard to make the sale transaction possible and continued
to generate improved operating cash flows right up to the
completion date. We look forward to their continued support through
the transition services period and wish them well in their
subsequent transitions into new opportunities.
Anthony Farrow, CEO Bryan Disher, CFO
24 September 2021 24 September 2021
Independent Review Report
For the period ended 30 June 2021
Introduction
We have been engaged by Minds + Machines Group Limited ("the
Company") to review the consolidated interim financial information
of the Company and its subsidiaries (together, the "Group") for the
six months ended 30 June 2021 which comprises the consolidated
statement of total comprehensive income, the condensed consolidated
statement of financial position, the condensed consolidated
statement of cash flows, the condensed consolidated statement of
changes in equity and related notes. We have read the other
information contained in the interim report and considered whether
it contains any apparent misstatements or material inconsistencies
with the financial information.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
issued by the Auditing Practices Board and our Engagement Letter
dated 17 August 2021. Our work has been undertaken so that we might
state to the Company those matters we are required to state to them
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review
work, for this report, or for the conclusions we have formed.
Respective responsibilities of directors and auditor
The interim report, including the financial information
contained therein, is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the
interim report in accordance with the AIM Rules issued by the
London Stock Exchange, which requires that the interim report must
be prepared and presented in a form consistent with that which will
be adopted in the Company's annual accounts having regard to the
accounting standards applicable to such annual accounts.
Our responsibility is to express to the Company a conclusion on
the consolidated financial information in the interim report based
on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Emphasis of matter - basis of preparation
We draw attention to Note 2 to the interim report which explains
that, following the completion of the sale of the majority of the
Group's and assets and the planned disposal or discontinuation of
the remainder of the Group's operations, the directors do not
consider it appropriate to adopt the going concern basis in
preparing the interim financial information. Accordingly, the
interim financial information is prepared on a basis other than
going concern as described in Note 2. Our conclusion is not
modified in respect of this matter.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the consolidated financial information in
the interim report does not give a true and fair view of the
financial position of the Group as at 30 June 2021 and of its
financial performance and its cash flows for the six months then
ended, in accordance with the AIM Rules issued by the London Stock
Exchange.
Mazars LLP
Chartered Accountants
Tower Bridge House
St Katharine's way
London
E1W 1DD
24 September 2021
Notes:
(a) The maintenance and integrity of the Minds + Machines Group
Limited web site is the responsibility of the directors; the work
carried out by us does not involve consideration of these matters
and, accordingly, we accept no responsibility for any changes that
may have occurred to the interim report since it was initially
presented on the web site.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of financial information may differ from
legislation in other jurisdictions.
Consolidated Statement of Total Comprehensive Income
For the period ended 30 June 2021
Notes Six Months to Six Months to
30 June 2021 30 June 2020
(unaudited) (unaudited)
Restated
$ 000's $ 000's
================================================= ===== ============= =============
Continuing Operations
================================================= ===== ============= =============
Revenue - -
================================================= ===== ============= =============
Partner payments - -
================================================= ===== ============= =============
Cost of sales - -
================================================= ===== ============= =============
Gross Profit - -
================================================= ===== ============= =============
General and administrative expenses 5 (727) (1,189)
================================================= ===== ============= =============
Earnings before interest, taxation, depreciation
and amortisation (EBITDA) (727) (1,189)
================================================= ===== ============= =============
Depreciation and amortisation charge (43) (51)
================================================= ===== ============= =============
Finance costs (8) (11)
================================================= ===== ============= =============
Loss before taxation (778) (1,251)
================================================= ===== ============= =============
Income tax (5) (1)
================================================= ===== ============= =============
Loss for the period from continuing operations (783) (1,252)
================================================= ===== ============= =============
Profit from discontinued operations 4 3,381 2,681
================================================= ===== ============= =============
Profit for the period (attributable to
equity holders of the parent) 2,598 1,429
================================================= ===== ============= =============
Other comprehensive income
================================================= ===== ============= =============
Item that may be reclassified subsequently
to profit or loss:
================================================= ===== ============= =============
Currency translation differences (257) 130
================================================= ===== ============= =============
Other comprehensive loss for the year
net of taxation (257) 130
================================================= ===== ============= =============
Total comprehensive income for the period
(attributable to equity holders of the
parent) 2,341 1,559
================================================= ===== ============= =============
Earnings / (loss) per share (cents)
================================================= ===== ============= =============
From continuing operations
================================================= ===== ============= =============
Basic 7 (0.09) (0.14)
================================================= ===== ============= =============
Diluted 7 (0.09) (0.14)
================================================= ===== ============= =============
From continuing operations and discontinued
operations
================================================= ===== ============= =============
Basic 7 0.30 0.16
================================================= ===== ============= =============
Diluted 7 0.29 0.15
================================================= ===== ============= =============
Consolidated Statement of Financial Position
As at 30 June 2021
Notes 30 June 2021 31 December
2020
(unaudited)
$ 000's $ 000's
===================================== ===== ============ ===========
Non-current assets
===================================== ===== ============ ===========
Goodwill - 2,828
===================================== ===== ============ ===========
Intangible assets 8 - 81,530
===================================== ===== ============ ===========
Fixtures and equipment 32 41
===================================== ===== ============ ===========
Right-of-use assets 98 2,132
===================================== ===== ============ ===========
Interest in joint ventures - 184
===================================== ===== ============ ===========
Other long-term assets - 185
===================================== ===== ============ ===========
Total non-current assets 130 86,900
===================================== ===== ============ ===========
Current assets
===================================== ===== ============ ===========
Trade and other receivables 10 477 3,481
===================================== ===== ============ ===========
Cash and cash equivalents 9 10,419 8,904
===================================== ===== ============ ===========
10,896 12,385
===================================== ===== ============ ===========
Assets classified as held for sale 4 88,347 -
===================================== ===== ============ ===========
Total current assets 99,243 12,385
===================================== ===== ============ ===========
TOTAL ASSETS 99,373 99,285
===================================== ===== ============ ===========
Current liabilities
===================================== ===== ============ ===========
Trade and other payables 11 (992) (6,062)
===================================== ===== ============ ===========
Deferred revenue - (13,427)
===================================== ===== ============ ===========
Lease liabilities (82) (972)
===================================== ===== ============ ===========
(1,074) (20,461)
===================================== ===== ============ ===========
Liabilities directly associated with
assets classified as held for sale 4 (20,016) -
===================================== ===== ============ ===========
Total current liabilities (21,090) (20,461)
===================================== ===== ============ ===========
Non-current liabilities
===================================== ===== ============ ===========
Lease liabilities (45) (2,855)
===================================== ===== ============ ===========
TOTAL LIABILITIES (21,135) (23,316)
===================================== ===== ============ ===========
NET ASSETS 78,238 75,969
===================================== ===== ============ ===========
EQUITY
===================================== ===== ============ ===========
Share premium 12 77,330 77,371
===================================== ===== ============ ===========
Other reserves (500) (500)
===================================== ===== ============ ===========
Foreign exchange reserve 465 722
===================================== ===== ============ ===========
Retained earnings 943 (1,624)
===================================== ===== ============ ===========
TOTAL EQUITY 78,238 75,969
===================================== ===== ============ ===========
Consolidated Statement of Cash Flows
For the period ended 30 June 2021
Notes Six Months to Six Months to
30 June 2021 30 June 2020
(unaudited) (unaudited)
Restated
$ 000's $ 000's
============================================ ===== ============= =============
Cash flows from operations
============================================ ===== ============= =============
EBITDA from continuing operations (727) (1,189)
============================================ ===== ============= =============
EBITDA from discontinued operations 4 3,822 3,190
============================================ ===== ============= =============
Adjustments for:
============================================ ===== ============= =============
Bad debt provision 19 -
============================================ ===== ============= =============
Decrease in trade and other receivables 835 1,811
============================================ ===== ============= =============
Decrease in trade and other payables (1,541) (2,016)
============================================ ===== ============= =============
Profit on disposal of joint venture (406) -
============================================ ===== ============= =============
Share based payment expense 123 299
============================================ ===== ============= =============
Share of results of joint ventures - 1
============================================ ===== ============= =============
Foreign exchange (loss)/gain (253) 139
============================================ ===== ============= =============
Net cash flow from operating activities 1,872 2,235
============================================ ===== ============= =============
Cash flows from investing activities
============================================ ===== ============= =============
Proceeds from disposal of joint venture 525 -
============================================ ===== ============= =============
Payments to acquire intangible assets - (25)
============================================ ===== ============= =============
Payments to acquire fixtures and equipment (4) (21)
============================================ ===== ============= =============
Joint venture distribution - 123
============================================ ===== ============= =============
Net cash flow from investing activities 521 77
============================================ ===== ============= =============
Cash flows from financing activities
============================================ ===== ============= =============
Repurchase of vested employee options/RSU's (192) -
============================================ ===== ============= =============
Share buy back (41) (1,192)
============================================ ===== ============= =============
Principal elements of lease payments (645) (407)
============================================ ===== ============= =============
Net cash flow used in financing activities (878) (1,599)
============================================ ===== ============= =============
Net increase in cash and cash equivalents 1,515 713
============================================ ===== ============= =============
Cash and cash equivalents at beginning
of period 8,904 6,583
============================================ ===== ============= =============
Cash and cash equivalents at end of period 10,419 7,296
============================================ ===== ============= =============
Consolidated Statement of Changes in Equity
For the period ended 30 June 2021
Share capital Share premium Other reserves Foreign currency Retained Total
$ 000's $ 000's $ 000's translation earnings $ 000's
reserve $ 000's
$ 000's
======================= ============= ============= ============== ================ ========= ========
As at 1 January 2020
(restated) - 80,217 (500) 904 (4,159) 76,462
======================= ============= ============= ============== ================ ========= ========
Profit for the period - - - - 1,429 1,429
======================= ============= ============= ============== ================ ========= ========
Other comprehensive
income - - - 130 - 130
======================= ============= ============= ============== ================ ========= ========
Total comprehensive
income - - - 130 1,429 1,559
======================= ============= ============= ============== ================ ========= ========
Share buy back - (1,192) - - - (1,192)
======================= ============= ============= ============== ================ ========= ========
Share based payments - - - - 299 299
======================= ============= ============= ============== ================ ========= ========
As at 30 June 2020
(unaudited/restated) - 79,025 (500) 1,034 (2,431) 77,128
======================= ============= ============= ============== ================ ========= ========
As at 1 January 2021 - 77,371 (500) 722 (1,624) 75,969
======================= ============= ============= ============== ================ ========= ========
Profit for the period - - - - 2,598 2,598
======================= ============= ============= ============== ================ ========= ========
Other comprehensive
income - - - (257) - (257)
======================= ============= ============= ============== ================ ========= ========
Total comprehensive
income - - - (257) 2,598 2,341
======================= ============= ============= ============== ================ ========= ========
Share buy back - (41) - - - (41)
======================= ============= ============= ============== ================ ========= ========
Share based payments - - - - 123 123
======================= ============= ============= ============== ================ ========= ========
Repurchase vested
employee options/RSUs - - - - (154) (154)
======================= ============= ============= ============== ================ ========= ========
As at 30 June 2021
(unaudited) - 77,330 (500) 465 943 78,238
======================= ============= ============= ============== ================ ========= ========
-- Share premium - This reserve includes premiums received on
issue of share capital. Any transaction costs associated with the
issue of shares are deducted from share premium.
-- Other reserves - This reserve represents the gains and losses
arising from financial instruments designated at fair value through
OCI.
-- Foreign currency reserve - This reserve represents gains and
losses arising on the translation of foreign operations into the
Group's presentational currency.
-- Retained earnings - This reserve represents the cumulative profits and losses of the Group.
Notes to the Financial Statements
For the period ended 30 June 2021
1 Nature of Operations
Minds + Machines Group Limited is a company registered in the
British Virgin Islands under the BVI Business Companies Act 2004.
The Company's ordinary shares are traded on the AIM market operated
by the London Stock Exchange. These financial statements include
the results of the Company and its subsidiaries (the "Group").
As at 30 June 2021, the Group was the owner and operator of a
portfolio of generic top level domain names ("gTLDs") licensed to
it by the Internet Corporation for Assigned Names and Numbers
("ICANN"). Historically the Group's principal business was
generating revenues through the registration and renewal of domain
names within its gTLDs ("Registry Business"). The Company is also a
registry service provider ("RSP Business") providing back-end
services for the owners of other gTLDs.
2 Discontinuation of Operations and Basis of Preparation
On 7 April 2021, the Company entered into an asset purchase
agreement with Registry Services, LLC, ("GoDaddy Registry"), an
affiliate of GoDaddy Inc., whereby GoDaddy Registry agreed to
acquire substantially all the Group's Registry Business for cash of
$120 million. The sale was approved by the Company's shareholders
on 23 April 2021 and completed effective 11 August 2021. The
Company is currently providing certain transition services to
facilitate the transition of the assets to GoDaddy Registry.
The Directors also determined that the Group would exit the RSP
Business following the completion of the sale of the Registry
Business. On 31 August 2021 the Group's contract for provision of
RSP services to the .london gTLD ended and management is now in the
process of disposing of or winding down the Company's remaining RSP
Business and dissolving its subisidiaries.
As the Directors had determined during the period that the
Group's businesses would be sold or discontinued, all operations,
with the exception of ongoing administrative expenses and similar,
are reported as discontinued operations in the statement of profit
and loss and all associated assets and liabilities are reported as
held for sale on the statement of financial position.
On 11 August 2021 the Directors announced a buy back of up to
$80 million of the Company's ordinary shares to provide an initial
return of the proceeds from the Registry Business sale to the
Company's shareholders.
As the Company has completed the sale of the majority of its
assets, and the Directors decided to dispose of or otherwise
discontinue the remainder of the Group's operations and return a
significant portion of the Group's cash to shareholders, the Group
can no longer be considered a going concern for financial reporting
purposes and the financial information has therefore been prepared
on a basis other than going concern. However even after the $80
million share buy back, the Directors have a reasonable expectation
that the Group has adequate resources to meet its obligations as
they fall due for a period of at least 12 months from the date of
signing these financials statements.
Basis of presentation
This condensed consolidated financial information includes the
results of the Company and its subsidiaries. They have been
prepared using the same accounting policies, with the exception of
going concern as described above, as those disclosed in the last
annual financial statements, and should be read in conjunction with
the Group's last annual consolidated financial statements as at and
for the year ended 31 December 2020. They do not include all of the
information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and
performance since the last financial statements. The audit report
on the Annual Report and Financial Statements was unqualified and
did not contain an emphasis of matter paragraph.
Approval
These interim financial statements were authorized for issue by
the Company's Board of Directors on 24 September 2021.
New standards and interpretations not yet adopted
At the date of authorization of these financial statements,
several new, but not yet effective, Standards and amendments to
existing Standards, and Interpretations have been published by the
International Accounting Standards Board. None of these Standards
or amendments to existing Standards have been adopted early by the
Group. Management anticipates that all relevant pronouncements will
be adopted for the first period beginning on or after the effective
date of the pronouncement. New Standards, amendments and
Interpretations not adopted in the current year have not been
disclosed as they are not expected to have a material impact on the
Group's financial statements.
3 Use of Judgements and Estimates
In preparing these interim financial statements, management has
made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key source of estimation
uncertainty were the same as those described in the last annual
financial statements.
4 Discontinued Operations and Prior Period Adjustment
The results of the discontinued operations, which have been
included in the profit for the period, were as follows:
H1 2021 H1 2020
(unaudited) (unaudited)
Restated
$ 000's $ 000's
======================================== ============ ============
Revenue 8,765 8,488
======================================== ============ ============
Less: Partner payments (1,485) (1,055)
======================================== ============ ============
Cost of sales (1,137) (1,779)
======================================== ============ ============
Gross profit 6,143 5,654
======================================== ============ ============
General and administrative expenses (2,727) (2,465)
======================================== ============ ============
Profit on disposal of interest in joint
venture 406 -
======================================== ============ ============
Share of results of joint venture - 1
======================================== ============ ============
EBITDA 3,822 3,190
======================================== ============ ============
Depreciation and amortisation (250) (295)
======================================== ============ ============
Finance costs (191) (214)
======================================== ============ ============
Profit from discontinued operations
before taxes 3,381 2,681
======================================== ============ ============
Attributable tax expense - -
======================================== ============ ============
Profit from discontinued operations 3,381 2,681
======================================== ============ ============
During the period the Board of Directors determined that Group
employees would be terminated upon completion of the transition
services. All employees were given notice of the Company's intent
to terminate subject to the completion of the sale and offered
severance and other payments, including the buy back of vested
options and restricted share units ("RSU"s), for those committing
through the end of the transition services period. Serverance and
other employee retention payments of $982k have been accrued in the
H1 2021 accounts and included in discontinued operations.
The major classes of assets and liabilities comprising the
operations classified as held for sale are as follows:
30 June 2021
(unaudited)
$ 000's
==================================================== === ============
Goodwill 2,828
========================================================= ============
Intangibles (note 11) 81,465
========================================================= ============
Fixtures and equipment 1
========================================================= ============
Right-of-use assets 1,759
========================================================= ============
Other long term assets 185
========================================================= ============
Trade receivables 763
========================================================= ============
Prepayments and other receivables 1,346
========================================================= ============
Total assets classified as held for sale 88,347
========================================================= ============
Trade payables (244)
========================================================= ============
Registrar prepayments (1,259)
========================================================= ============
Accruals and other liabilities (2,909)
========================================================= ============
Lease liabilities (3,187)
========================================================= ============
Deferred revenue (12,417)
========================================================= ============
Total liabilities associated with assets classified
as held for sale (20,016)
========================================================= ============
Net assets of disposal group 68,331
========================================================= ============
As disclosed in the 2020 annual financial statements, in October
2020 the Company determined that as the result of management's
override of the Group's internal controls, certain contracts had
not been accounted for correctly in 2019 and the first half of
2020. The impact to the comparative information for the
discontinued operations is described below.
Profit from Discontinued Operations (extract) As reported Adjustment Restated
$ 000's $ 000's $ 000's
============================================== =========== ========== ========
Revenue from discontinued operatioins 8,408 80 8,488
=============================================== =========== ========== ========
Cost of sales from discontinued operations) (1,851) 72 (1,779)
=============================================== =========== ========== ========
Depreciation and amortisation charge (354) 59 (295)
=============================================== =========== ========== ========
Profit from discontinued operations 2,892 211 2,681
=============================================== =========== ========== ========
Earnings per share (cents) from continuing
and discontinued operations
=============================================== =========== ========== ========
Basic 0.13 0.03 0.16
=============================================== =========== ========== ========
Diluted 0.12 0.03 0.15
=============================================== =========== ========== ========
Cash flows (extract) As reported Adjustment Restated
$ 000's $ 000's $ 000's
========================================== =========== ========== ========
Net cash from operating activities 2,525 (290) 2,235
=========================================== =========== ========== ========
Net cash flows from investing activities (213) 290 77
=========================================== =========== ========== ========
Net cash flows from financing activities (1,599) - (1,599)
=========================================== =========== ========== ========
Net increase in cash and cash equivalents 713 - 713
=========================================== =========== ========== ========
5 General administrative expenses
H1 2021 H1 2020
(unaudited) (unaudited)
Restated
$ 000's $ 000's
=============================== ============ ============
Operating expenses 901 1,728
=============================== ============ ============
Share based payment expense 123 299
=============================== ============ ============
Foreign exchange (gain) / loss (297) 190
=============================== ============ ============
727 1,189
=============================== ============ ============
6 Share Based Payments
Share based payments of $123k (H1 2020: $299k) relate to the
estimated fair value of share options and RSUs granted under the
Company's share option and RSU plans, determined by using the
Black-Scholes model, and expensed over the vesting period of the
share options and RSUs.
During the period, the Company granted 1,200,000 RSU's to a
member of the Executive team (H1 2020: 13,853,200 options and
10,915,400 RSU's issued to the Executive team and key employees).
During the period, the Company also repurchased 2,343,230 share
options and RSUs.
As at the period end 11,860,000 options and RSUs are outstanding
(31 December 2020: 13,003,226).
7 Earnings per share
H1 2021 H1 2020
(unaudited) (unaudited)
======================================================= ============ ============
Number of shares
======================================================= ============ ============
Weighted average number of ordinary shares used in
calculating basic earnings per share (millions) 875.58 913.74
======================================================= ============ ============
Effect of potentially dilutive ordinary shares - share
options and RSUs (millions) 11.11 65.66
======================================================= ============ ============
Weighted average number of ordinary shares for the
purpose of calculating diluted earnings per share
(millions) 886.69 979.40
======================================================= ============ ============
All potential shares are anti-dilutive where losses are
reported.
8 Intangible Assets
generic Top Software and Contract based Other Total
Level Domains development intangible $ 000's $ 000's
$ 000's costs assets
$ 000's $ 000's
============================ ============== =============================== ============== ======== ========
Cost
============================ ============== =============================== ============== ======== ========
At 1 January 2020
(restated) 81,198 2,836 4,206 170 88,410
============================ ============== =============================== ============== ======== ========
Additions 171 24 - - 195
============================ ============== =============================== ============== ======== ========
Disposed of / scrapped - (2,490) (4,206) (170) (6,866)
============================ ============== =============================== ============== ======== ========
Exchange differences 49 39 - - 88
============================ ============== =============================== ============== ======== ========
At 31 December 2020 81,418 409 - - 81,827
============================ ============== =============================== ============== ======== ========
Additions - - - - -
============================ ============== =============================== ============== ======== ========
Exchange differences (17) (7) - - (24)
============================ ============== =============================== ============== ======== ========
At 30 June 2021 (unaudited) 81,401 402 - - 81,803
============================ ============== =============================== ============== ======== ========
Accumulated amortization and
impairment
============================================ =============================== ============== ======== ========
At 1 January 2020
(restated) - (2,640) (4,206) (170) (7,016)
============================ ============== =============================== ============== ======== ========
Charge for the year (117) - - (117)
============================ ============== =============================== ============== ======== ========
Disposed of / scrapped - 2,490 4,206 170 6,866
============================ ============== =============================== ============== ======== ========
Exchange differences - (30) - - (30)
============================ ============== =============================== ============== ======== ========
At 31 December 2020 - (297) - - (297)
============================ ============== =============================== ============== ======== ========
Charge for the period - (46) - - (46)
============================ ============== =============================== ============== ======== ========
Exchange differences - 5 - - 5
============================ ============== =============================== ============== ======== ========
At 30 June 2021 (unaudited) - (338) - - (338)
============================ ============== =============================== ============== ======== ========
Carrying amount
============================ ============== =============================== ============== ======== ========
At 30 June 2021 (unaudited) 81,401 64 - - 81,465
============================ ============== =============================== ============== ======== ========
At 31 December 2020 81,418 112 - - 81,530
============================ ============== =============================== ============== ======== ========
The Group's intangible assets have been classified as being
held-for-sale.
9 Cash and Cash Equivalents
Of the Group's total cash balances of $10,419k (2020: $8,904k),
$446k (2020: $807k) were restricted funds. These amounts were held
at the period end to fund the letters of credit required by ICANN
and certain vendors.
10 Trade and Other Receivables
30 June 2021 31 December
2020
(unaudited)
$ 000's $ 000's
======================================================= ============ ===========
Trade receivables 29 1,479
======================================================= ============ ===========
Allowance for doubtful debts - (52)
======================================================= ============ ===========
Net trade receivables 29 1,427
======================================================= ============ ===========
Other receivables (including VAT) 30 144
======================================================= ============ ===========
Prepayments (including partner payments and marketing) 418 1,910
======================================================= ============ ===========
Trade and other receivables 477 3,481
======================================================= ============ ===========
Trade receivables are amounts due from customers and are stated
at the original invoice amount less any allowance made for doubtful
receivables . Management believes that the net trade receivables as
reflected above are recoverable and stated at fair value.
11 Trade and Other Payables
30 June 2021 31 December 2020
(unaudited)
$ 000's $ 000's
========================= ============ ================
Trade payables 3 181
========================= ============ ================
Registrar prepayments - 2,333
========================= ============ ================
Other liabilities 411 215
========================= ============ ================
Accruals 578 3,267
========================= ============ ================
Due to joint ventures - 66
========================= ============ ================
Trade and other payables 992 6,062
========================= ============ ================
12 Share Capital and Premium
Called up, allotted, issued and fully Number of shares Price per share Total
paid ordinary shares of no par value (cents/pence) $ 000's
====================================== ================ =============== ========
As at 1 January 2020 919,020,402 80,217
====================================== ================ =============== ========
Shares issued:
====================================== ================ =============== ========
Share buy back (42,991,406) 6.6c/5.1p (2,846)
====================================== ================ =============== ========
31 December 2020 876,028,996 77,371
====================================== ================ =============== ========
As at 1 January 2021 876,028,996 77,371
====================================== ================ =============== ========
Share buy back (545,988) 7.3c/5.6p (41)
====================================== ================ =============== ========
30 June 2021 (unaudited) 875,483,008 77,330
====================================== ================ =============== ========
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END
IR EASNXALKFEFA
(END) Dow Jones Newswires
September 27, 2021 11:49 ET (15:49 GMT)
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