TIDMCLX
RNS Number : 6581Z
Calnex Solutions PLC
25 May 2021
25 May 2021
Calnex Solutions plc
("Calnex", the "Company" or the "Group")
FY21 Final Results
Calnex Solutions plc (AIM: CLX) provides test and measurement
solutions for the global telecommunications sector and is pleased
to announce its audited results for the 12 months ended 31 March
2021 ("FY21" or the "Period").
Financial Highlights
GBP000 FY21 FY20 YOY %
Audited Audited change
Revenue 17,978 13,739 31%
Underlying EBITDA 5,496 4,157 32%
Adjusted profit before
tax 5,068 3,536 43%
Adjusted basic EPS (pence) 5.83 4.58 27%
Adjusted diluted EPS
(pence) 5.21 3.66 42%
Closing cash 12,668 3,664 246%
Statutory measures :
EBITDA 6,554 5,788 13%
Profit before tax 3,647 2,981 22%
Basic EPS (pence) 4.68 3.81 23%
Diluted EPS (pence) 4.18 3.05 37%
-- Revenue growth of 31% to GBP18.0m (FY20: GBP13.7m) as a
result of a robust trading performance, exceeding initial
expectations for the year.
-- Underlying EBITDA growth of 32% to GBP5.5m (FY20: GBP4.2m)
and 43% growth in adjusted profit before tax to GBP5.1m (FY20:
GBP3.5m) reflects the strong revenue growth and reduced travel and
events costs as a result of COVID-19.
-- Successful fundraise of GBP22.5m in total funds including net
funds of GBP4.9m for the business on admission to AIM on 5(th)
October 2020.
-- Total outstanding debt of GBP1.9m was fully repaid with IPO
proceeds in October 2020. A GBP3.0m Revolving Credit Facility was
put in place post admission to AIM and is currently undrawn.
-- GBP9.0m total cash generated as a result of solid trading
performance (FY20: GBP1.8m), supplemented by receipt of IPO
proceeds.
-- Closing cash position of GBP12.7m (31 March 2020: GBP3.7m)
provides strong basis for expansion.
Operational Highlights
-- Strong order levels across the board with all regional and product line targets exceeded.
-- Continued high levels of repeat revenue, supplemented by growth in customer numbers.
-- Expansion of Calnex's Business Development and R&D teams
accelerated, to support the growth of the Company's product
offering and capitalise on available opportunities.
-- Little negative impact from COVID-19 on business, customer
base or supply chain, although a change in spending patterns from
some key customers, with some orders brought forward into FY21.
Outlook
-- The business continues to benefit from the evolutionary
trends affecting the telecoms sector, notably in 5G and cloud
computing, which in turn drive growth in the need for test and
measurement instrumentation and solutions. The Board is looking
forward with confidence to the Group continuing to make further
progress in the current financial year and beyond.
Tommy Cook, Chief Executive Officer and founder of Calnex,
said:
" In what has been an exceptional year for Calnex, I am
delighted to present the Group's maiden full year results. Not only
did the Group experience growth across all product lines and
achieve sales of GBP18.0m, exceeding our initial expectations for
the year, but we succeeded in delivering this strong performance
whilst navigating the global pandemic and starting our next chapter
as a public company.
"As demonstrated this year, as well as in previous years, our
growth strategy and business model provide a strong platform for
sustainable growth. Looking ahead, the underlying market growth
drivers provide us with confidence that the long-term demand for
telecoms test and measurement instrumentation and solutions will
continue to expand.
"We are confident that our breadth of product offering, depth of
customer relationships and the strong underlying market drivers
mean Calnex is well positioned and we anticipate that results in
FY22 will be consistent with FY21, representing further growth when
taking into account the impact of COVID-19 on FY21 through
accelerated revenues and travel savings. We see a significant
opportunity for both organic and acquisitive growth in the medium
term and look to the future with confidence."
For more information, please contact:
Calnex Solutions plc Via Alma PR
Tommy Cook, Chief Executive Officer
Ashleigh Greenan, Chief Financial Officer
+44 (0)131 220
Cenkos Securities plc - NOMAD 6939
Derrick Lee, Peter Lynch
+44(0) 20 3405
Alma PR 0213
Caroline Forde, Harriet Jackson, Joe Pederzolli
Overview of Calnex
Calnex designs, produces and markets test instrumentation and
solutions for network synchronization and network emulation,
enabling its customers to validate the performance of the critical
infrastructure associated with telecoms networks. To date, Calnex
has secured and delivered orders to over 600 customer sites in 68
countries across the world. Customers include Ericsson, Nokia, BT,
China Mobile, NTT, Intel, Qualcomm, IBM and Facebook.
Founded in 2006, Calnex is headquartered in Linlithgow,
Scotland, with additional locations in Belfast, Northern Ireland
and California in the US, supported by sales teams in China and
India. Calnex has a global network of partners, providing a
worldwide distribution capability.
Chairman's Statement
I am pleased to report on a positive year for Calnex, certainly
one of the most impressive performances from the business since I
became Chairman of the Company in 2013. Completing an IPO is a
significant feat, but to do so against the backdrop of a global
pandemic, while delivering revenue and profit growth considerably
ahead of the Board's expectations at the time of the IPO, speaks to
the quality of the business. Much of the success lies in the
strength of the product offering, the depth of the Company's
long-standing customer relationships, the understanding of the
industry and the excellent structures and teams within the
business. The strong performance in FY21 has also in part been
driven by the response of our customers to the threat of the
pandemic, pulling some orders into the year which we would have
expected in FY22.
Results
The Group delivered revenue growth in FY21 of 31% to GBP18.0m
(FY20: GBP13.7m) and adjusted profit before tax growth of 43% to
GBP5.1m (FY20: GBP3.5m), whilst ending the year with a closing cash
figure of GBP12.7m (FY20: GBP3.7m) including GBP4.9m from the net
proceeds of the IPO.
Successful IPO
The successful IPO on AIM in October 2020 provided the Group
with the funds to invest in its continued success, expanding our
R&D, Sales & Marketing and Operations teams as we seek to
capitalise on the long-term transition of the telecoms market to 5G
and the growth of cloud computing. Access to the capital markets
also provides the business with the ability to consider larger
acquisitions of complementary technologies and whilst opportunities
have been limited due to the COVID-19 pandemic, this remains part
of the Company's growth strategy.
ESG considerations
The attitude of Calnex towards caring for its people and the
communities around it has always been a key feature of the
business. During this difficult year, this strong sense of
community within Calnex was evident in the level of cohesion that
remained while teams were working from home, with multiple new
initiatives devised and embraced. Several positive learnings have
been taken from the enforced work-from-home situation that the
Company plans to utilise to enhance the work/life balance of the
team once social distancing restrictions are lifted. The fast
adaptation to the situation and the way the team has looked to
learn epitomise the attitude across the Company of openness to
change and willingness to seek improvements.
In a traditionally male-dominated industry, Calnex has always
sought to have a diverse workforce, understanding the benefits it
provides, with a good level of female representation on both our
Board and executive management team. We understand talent is
available in all groups in society, and what's more, a diverse and
broad culture mix adds to the innovative culture central to
Calnex's business. The team has expanded considerably during the
year, drawing new colleagues from around the world.
Alongside a commitment to our people and community, the
environmental impact of our operations are also important
considerations. The Board oversees a policy of active awareness of
how best to incorporate effective environmental goals into the
Group's strategic decisions, operations and supply chain.
As a Board, we are committed to high standards of corporate
governance and oversight. Ann Budge and I have been on the Calnex
Board for some time and have witnessed the professionalism with
which the business is managed by Tommy, Ashleigh and the executive
management team , and have welcomed the additional input and
expertise from Graeme Bissett who joined the Calnex board prior to
IPO, lending an additional level of financial and governance
oversight.
Looking ahead
No doubt the year ahead will see further changes, as we all
adapt to the post COVID-19 world and learn how to do business in
this new era. I am, however, certain that Calnex has the right
platform to succeed no matter how the world progresses - whether
face to face meetings with customers resume or we continue to
interact virtually.
With many of the world's leading players in the telecoms market
as customers, a proven track record in innovation, strong financial
position and global distribution capability, Calnex is well
positioned to capitalise on the opportunities ahead.
George Elliott
Non-Executive Chairman
24 May 2021
CEO's Statement and Operational Review
I am delighted to present Calnex's maiden full year results for
the year ended 31 March 2021. It has been an exceptional year for
the Group, in which we experienced growth across all product lines
and exceeded our initial expectations for the year, achieving
revenues of GBP18.0m. What is more, we were delighted to have
achieved this strong performance whilst navigating the global
pandemic and starting our next chapter as a public company. As a
result of careful management and planning, the Group's IPO in
October 2020 was a significant success and we are extremely
encouraged by the welcoming reception that we have had from key
stakeholders. We remain confident that AIM will facilitate the
Group's growth ambitions and are committed to executing on our
long-term growth strategy.
COVID-19
We are fortunate to operate in a sector not severely impacted by
the consequences of dealing with this pandemic, successfully
maintaining our pace of innovation and close relationships with our
customers around the world despite the challenges posed by
COVID-19. Our priority during this time has been ensuring the
well-being of our staff, providing a safe working environment and
ensuring our teams remained supported, connected and motivated.
The pandemic has had little negative impact on the telecoms
industry and if anything it has highlighted the need for robust,
fast broadband and resilient telecoms networks and infrastructure.
We believe the pandemic affected some customer spending patterns
during FY21, resulting in the early pull through of approximately
GBP0 .8m to GBP1.1m of orders we had expected in FY22.
Customer metrics
Against this backdrop, we were pleased to have seen such
consistency in our customer metrics in the year. The number of
customers sold to in the year increased by 15 to 192 (FY20:
increase of 12 to 177), our top 10 revenue generating customers
accounted for 49% of revenues (FY20: 52%) and we continued the
trend of increasing our proportion of revenues coming from
non-telecoms customers to 23% of revenues (FY20: 22%). Our
geographic spread of orders remained broadly evenly split between
our three regions: the Americas, North Asia and Rest of World.
Transition to 5G and growth in Cloud Computing
The telecoms industry will continue to be impacted by the
evolutionary trends affecting the sector. The migration of mobile
networks to 5G, the emergence of the Internet of Things, the
exponential growth of data creation and the shift to using cloud
computing are all driving forces in the continuous development of
telecom networks around the world, which in turn generates growth
in the need for test and measurement instrumentation and solutions.
The global market for telecoms test and measurement equipment for
mobile networks alone is forecast to expand at a CAGR of 11.5 per
cent from 2020 through to 2024 (Frost and Sullivan). The Board
believes this provides favourable market conditions for Calnex for
the foreseeable future.
The pace of change and development of new standards and
requirements for the infrastructure supporting the 5G mobile radio
network continues unabated. One example of this is the traction
being gained by a major initiative looking to open up the mobile
base station market to greater participation, the Open RAN (Radio
Access Network) standards. Having historically been dominated by
three large vendors, the O-RAN standards support interoperation
between a wider range of equipment vendors. The O-RAN Alliance, (
https://www.o-ran.org/ ), was founded in 2018 by five major Network
Operators and now has a membership of over 250 companies, including
Calnex. It is too early to say how this will ultimately impact the
dynamics of the market but from a test vendors' view, more choice
and more companies participating in the market bode well for
providers of test solutions over the coming years.
In the Cloud Computing world, a development that is gaining
traction is the use of Mobile Edge Computing, (MEC). Rather than
have all communications from end applications and equipment travel
back to centralised data centres, MEC's are located near the edge
of the network to reduce inherent latency and speed of response for
applications that rely on fast, reliable response. The MEC needs to
maintain alignment with centralised data centres to ensure data
integrity, resulting in the growing need for greater communication
management between the MEC and end application plus between the
data centre and MEC. New equipment, new networking challenges and
new network management, all represent change that can result in the
need for test equipment.
O-RAN and MEC are two important initiatives gaining significant
interest but they are far from the only change initiatives
underway. The need to evolve and enhance the entire telecom
infrastructure to meet the growing and changing needs of end users
both today and in the future, is incessant. With change being a
core driver for the test industry, this level of development bodes
well for sustainable growth opportunities for Calnex.
Strategy
The Group's strategy set out at the time of our IPO remains in
place, with this year's developments reinforcing the Board's view
that our strategy is the right one. Our strategy comprises three
areas of focus: product innovation to capitalise on the transition
to 5G, expansion into Cloud Computing and other niche markets, and
identifying and evaluating attractive M&A opportunities. We
believe that focusing on these three areas provides us with the
best route to growth and is the optimal way to capitalise on the
opportunities available to us.
Product innovation to support the transition to 5G
Calnex has a market-leading suite of product platforms which are
currently delivering test and measurement solutions to customers
across the world. With the 5G vision supporting a rapidly evolving
test and measurement sector, along with the further opportunities
emerging from the move to software defined networks (SDN) and cloud
computing, Calnex is developing its current product platforms in
line with its existing customers' needs, following the trends to
higher transmission rates and tracking new standards.
We successfully delivered product innovation within our existing
solutions and markets during the year including adding new
capabilities to our Lab Sync product. As a result of these
enhancements, Lab Sync experienced strong customer orders,
including support for Flex-Ethernet frame format at 100G, a
structure gaining significant traction, in particular, with major
Chinese telecom operators.
Expansion into cloud computing and other niches
Another area of focus for Calnex is the identification of
additional opportunities in adjacent and new markets, where the
Company's current products and solutions can be deployed to broaden
its addressable markets. One such example is the ongoing
development of a new Virtual SNE (network emulation) product,
targeting engineering teams in large enterprises that develop their
own customer applications with cloud computing environments (such
as banks and retailers) as well as the traditional telecom sector.
A major evolution of the software platform in the SNE will see
significant usability enhancements released early in FY22, and will
enable delivery of a virtual SNE towards the end of FY22. Utilising
a common platform will allow both versions to maintain
functionality alignment as we make further enhancements in the
future.
M&A opportunities
In addition to organic growth, we believe that targeted
acquisitions are a favourable route to growth. We continually
assess the market for select M&A opportunities, however, we
have strict criteria and will ensure that any acquisitions are
strategic and earnings enhancing. Opportunities that we would
consider include complementary products or technologies that can
enhance Calnex's existing portfolio, or where the acquisition
target provides the Group with access to a related or adjacent
growth market.
The world continues to evolve, following the impact of COVID-19,
and the Board remains cognisant of the impacts it may yet have on
our ability to deliver our strategy, such as the ability to hire at
the pace we wish, and also the ongoing geopolitical tensions
between the US and China, which may impact upon certain of our
customers and we are of course, always alert to new entrants
entering the market. However, our breadth of customer base, across
multiple regions, the successes we have had through this year in
hiring excellent new team members and our established customer
relationships and industry connections, provide us with confidence
on our ongoing ability to deliver.
Financial performance
We experienced continued strong demand across all regions with
all product lines exceeding performance expectations, and high
levels of repeat demand from our existing customers. This resulted
in revenue growth in FY21 of 31% to GBP18.0m (FY20: GBP13.7m),
underlying EBITDA growth of 32% to GBP5.5m (FY20: GBP4.2m) and
adjusted profit before tax of GBP5.1m (FY20: GBP3.5m). We believe
the impact of COVID-19 on accelerating customer orders and on
travel cost savings resulted in approximately GBP1m of benefit to
adjusted profit before tax. The Group ended the year with a closing
cash figure of GBP12.7m (FY20: GBP3.7m) including GBP4.9m from the
net proceeds of the IPO, providing us with a strong financial
position as we entered the new financial year.
Operations
We have an ethos of continuous improvement, seeking ways to do
what we do better, more efficiently and at scale. The preparation
for the IPO and subsequent entry into the capital markets has
required a new level of financial control within the business and
we have supported this through the expansion of our finance team
and continuing to strengthen our internal processes and controls .
Other areas of investment through the year have included the
development of our Quality Management System to utilise a more
systematic auditing approach to promote continuous improvement.
Additional investment has gone into the New Product Introduction
phase to increase the effectiveness and speed with which new
products can pass from R&D into Manufacturing, thereby
accelerating manufacturing ramp-up. We are confident we have the
organisational structure to deliver the next phase of growth for
the business.
Employees
Our employees are Calnex's most important asset and we endeavour
to reflect this in our culture. Doing what we say we will, has
always been a core tenet of our leadership, key to generating a
working environment where success comes from motivated employees
who feel valued and respected. We strive to achieve an inclusive
community within Calnex, keeping our teams informed through regular
all-employee communications, including presentations by the
executive management team and monthly newsletters. There is a
strict approach to treating each person equally and individually
enabling our people to develop their skills and capabilities and to
increase their contribution to the Group. Calnex believes teams are
enhanced with inclusion of people from a broad spectrum of
backgrounds and experiences, creating groups capable of dealing
with all the challenges they face.
At the start of the pandemic, we were quick to adjust to remote
working and provided our staff with the resources they needed so
they could continue to work as normal from their homes. We embraced
video meetings to continue team interaction for business
effectiveness as well as setting up virtual coffee meetings,
exercise classes and mindfulness sessions to promote continued
cross-team engagements and personal wellbeing.
We have continued the planned expansion of our teams through the
course of the year. While hiring new recruits and integrating them
into the business during the lockdown was initially challenging,
through our strong hiring strategies and updated induction process
we have now successfully incorporated 25 new team members into our
R&D, sales and customer support functions, mostly in our UK
sites (in Linlithgow and Belfast) but also in USA, China and
Taiwan.
New employees are taken through a comprehensive induction
process, which has been adapted during these times to complement
the very limited face-to-face contact with regular video contact
from multiple team members to build relationships. Our flat
management structure encourages regular employee feedback,
supported by more formal interactions such as the annual appraisal
process, annual employee survey and regular HR-led feedback
sessions with staff on specific subject matters.
We have always had employee wellbeing as a priority for the
business, providing various benefits to employees, including
flexible working hours, an employee health insurance scheme,
lunchtime exercise classes and discounted gym membership, all of
which have been adapted, where possible, to the lockdown
environment.
A benefit of our IPO was the ability to enable employees to
benefit from the success of the Group through share ownership. An
HMRC approved Share Incentive Plan was introduced in October 2020
to encourage employee share ownership after admission to AIM, with
applications exceeding expectations.
Suppliers & customers
We believe strong business relationships with suppliers and
customers are crucial to the Group's success. Our executive
management, sales and technical support teams are focussed on
regular and open communication with customers to ensure we meet
their requirements and deliver quality customer service. Senior
management have regular meetings with key end customers to maintain
visibility over their technology roadmaps in order that the Group's
development plans remain aligned to our customers' future
strategies. While travel was severely restricted through FY21, the
challenging environment encouraged customers to accept video
meetings and good relationships were maintained throughout this
period. It is hoped that when travel becomes widely possible again,
customers will continue to use video technology, leading to more
frequent, effective communication and reducing travel requirements,
albeit face-to-face meetings will remain key to building and
maintaining strong relationships.
Transparent and honest engagement with our channel partners and
suppliers is vital to the delivery of our business. The Group has a
number of key strategic partners who support delivery of our
business in a number of areas including manufacturing, distribution
and our leased property. Our teams and employees maintain ongoing
dialogue with our channel partners and our key suppliers on a
regular basis to maintain strong working relationships and to
ensure that this positive engagement supports the business'
goals.
Calnex has two key partnerships, namely with our contract
manufacturer, Kelvinside Electronics, and with Spirent
Communications plc, providing a sales channel for a significant
proportion of our sales. In both cases, the relationships are long
established, having been in place for several years, (with
Kelvinside since 2007 and Spirent since 2013) and mutually
beneficial. We continue to work collaboratively with our partners
to identify areas for improvement, understanding there are always
opportunities to execute better to the mutual benefit of both
parties. For example, the most recent focus in Kelvinside/Calnex
management discussions has been to enhance the way we forecast
build quantities and enhance inventory management approaches to
increase robustness against potential changes in component lead
times.
Community & environment
The Group is focussed on including effective environmental goals
into its strategic decisions, operations and supply chain. Our
landlord at our main office in Linlithgow is Oracle Global
Services. Amongst other initiatives, they are committed to a 55%
reduction in emissions per unit of energy consumed within their
operations worldwide and to have 50% renewable energy use within
their real estate/facilities portfolio by 2025. In the Linlithgow
site, Oracle management have completed a number of projects over
the last few years, including LED lighting upgrades, roof
replacement and installation of electric vehicle charging points.
They have also recently upgraded their building management system,
to introduce better functionality in relation to heating and
cooling demands of the building such as analysis of weather data,
which can help with run times and performance and have plans to
increase energy efficiency in the building. The Group also conforms
to Waste Electrical and Electronic Equipment recycling rules and
regulations for the disposal of materials from our site.
Kelvinside, our contract manufacturer, has implemented an
Environmental Management system which is ISO 14001 certified
(International Standard for Environmental Systems). Kelvinside is
also a member of The Green Network for Businesses in Scotland, an
initiative run by the Energy Saving Trust in partnership with Zero
Waste Scotland's Energy Efficiency Business Support Service. The
Green Network consists of more than 200 businesses from all over
Scotland who have made improvements to save energy, cut waste and
reduce costs.
Spirent Communications plc, a key sales channel partner, reports
that in 2020, it sourced 100 per cent electricity from renewable
sources. Spirent is aiming to achieve carbon neutral certification
in two years and is working on a net zero carbon target by
2035.
We have a long-standing charity committee which is responsible
for identifying opportunities where we can assist those in need in
the local area. The Group also gives employees one day off a year
to spend on a charitable day helping in the community. Given such
activities this year were limited due to the pandemic, the Group
increased the money available to donate to charities selected by
employees and intend to participate in charitable activities within
the community as soon as permitted.
Outlook
As demonstrated this year, as well as in previous years, our
business model provides a strong platform for sustainable growth.
Looking ahead, the underlying market growth drivers provide us with
confidence that the long-term demand for telecoms test and
measurement instrumentation and solutions will continue to expand,
driven by the evolution to 5G and the growth of cloud computing.
Our ambition to develop the business through targeted acquisitions
will provide additional avenues for profitable growth.
The Board recognises that FY21 was an exceptional year in a
number of respects, including the early pull through of orders into
FY21. We are confident that our breadth of product offering, depth
of customer relationships and the strong underlying market drivers
mean Calnex is well positioned and we anticipate that results in
FY22 will be consistent with FY21, representing further growth when
taking into account the impact of COVID-19 on FY21 through
accelerated revenues and travel savings. We see a significant
opportunity for both organic and acquisitive growth in the medium
term and look to the future with confidence.
Tommy Cook
Chief Executive Officer
24 May 2021
Financial Review
Chief Financial Officer's Statement
The Group delivered a strong financial performance in the year
to 31 March 2021, with growth in revenue, underlying EBITDA and
adjusted profit before tax, resulting in a positive trading
cashflow for the year.
Financial KPIs
GBP000 FY21 FY20
Revenue 17,978 13,739
Gross Profit 13,965 10,623
Gross Margin 78% 77%
Underlying EBITDA (1) 5,496 4,157
Underlying EBITDA % 31% 30%
Adjusted Profit before
tax (2) 5,068 3,536
Adjusted Profit before
tax % 28% 26%
Closing cash 12,668 3,664
Capitalised R&D 3,326 2,882
Adjusted basic EPS (pence)
(3,4) 5.83 4.58
Adjusted diluted EPS
(pence) (3,4) 5.21 3.66
Statutory measures:
EBITDA 6,554 5,788
EBITDA % 36% 42%
Profit before tax 3,647 2,981
Profit before tax % 20% 22%
Basic EPS (pence) (4) 4.68 3.81
Diluted EPS (pence) (4) 4.18 3.05
(1) EBITDA including R&D amortisation, adjusted to exclude
discontinued operations, IPO costs and share based payments
(2) Adjusted to exclude discontinued operations, IPO costs and
share based payments
(3) Adjusted to exclude discontinued operations, IPO costs and
share based payments and the tax effect of these adjustments
(4) The weighted average number of shares in the EPS calculation
at note 29 reflects a position as though the total number of
Ordinary Shares of 60,024,103 (and outstanding share options and
warrants of 14,975,897) were in issue at the year ended 31 March
2020. This retrospective treatment for the FY20 comparatives is
required because there was no corresponding change in the Company's
economic resources as a result of the share capital reorganisation
which took place in September 2020. The weighted average number of
shares in issue at 31 March 2021 takes into account the 12,500,000
new shares issued and 2,650,000 new share options issued as a
result of the IPO.
Reconciliation of statutory figures to alternative performance
measures
FY21 FY20
GBP000 GBP000
Revenue 17,978 13,739
Cost of sales (4,013) (3,116)
Gross Profit 13,965 10,623
Other income 530 549
Administrative expenses (excluding
depreciation & amortisation) (7,941) (5,384)
------------------------------------------------ --------- --------
EBITDA 6,554 5,788
Amortisation of development costs (2,479) (2,186)
Add back exceptional items:
IPO costs 1,057 -
Issue of Free Shares on IPO under Share 166 -
Incentive Scheme
Share based payments 198 55
Loss from discontinued operations - 500
------------------------------------------------ --------- --------
Underlying EBITDA 5,496 4,157
Other depreciation & amortisation (273) (282)
Operating Profit 5,223 3,875
Finance costs (155) (339)
------------------------------------------------ --------- --------
Adjusted profit before tax 5,068 3,536
Exceptional items (1,421) (555)
------------------------------------------------ --------- --------
Profit before tax 3,647 2,981
Tax (194) (694)
------------------------------------------------ --------- --------
Profit for the year 3,453 2,287
Revenue
Revenue recognised in the year grew 31% to GBP18.0m (FY20:
GBP13.7m).
Order intake and revenue increased across all three product
lines compared to the prior year, and included the early pull
through of some orders into FY21.
Impact of COVID-19
We believe that there was an early pull through of between
GBP0.8m and GBP1.1m of revenue from FY22 into FY21 as a result of a
change in customer buying patterns through the COVID-19 pandemic.
Taking this and travel cost savings into account, we estimate a
positive impact of approximately GBP1.0m on the adjusted profit
before tax in the year.
Revenue model
Calnex generates revenues through the sale of bundled hardware
and software, alongside the provision of software support and
extended warranty programmes.
The Company's core sales model is bundled hardware and software.
Sales pricing is dependent on the product type and the complexity
of the software configuration built into the product package.
Calnex also sells stand-alone software upgrades under licence.
Each of Calnex's units comes with a standard warranty period
including maintenance and software upgrade cover in the event of
any software upgrades being released for the options purchased.
Calnex also sells software support programmes which provide
customers with access to future software upgrades which are not
included as part of the standard warranty. The Company also offers
extended warranty programmes to cover repairs falling out with the
standard warranty period.
Bundled hardware and software revenues are recognised when
delivered to the customer, with stand-alone software revenues
recognised in line with the licence period. Revenues from software
support and extended warranty programmes are typically recognised
on a straight-line basis over the term of the contract.
Many of the products and services developed and deployed by
Calnex's customers are interlinked and need to be tested
independently, such as the individual components which are then
built into the equipment used in telecoms networks. Calnex's test
products can be used by a combination of equipment vendors,
component manufacturers and network operators, to carry out testing
during a new product development cycle. A customer can choose to
use Calnex's products in the knowledge that a more consistent
result may be obtained if a Calnex test solution had already been
used on a particular product.
Sources of Revenue
Revenue streams
FY21 FY20
GBP000 GBP000
Warranty support revenue - recognised over
life of cover 1,469 1,266
Hardware and software revenue - recognised
on despatch/delivery 16,509 12,473
--------------------------------------------- ------- -------
Total revenue 17,978 13,739
In FY21, 92% (FY20: 91%) of the Company's revenues were
generated from the sale of hardware and software products, with 8%
(FY20: 9%) from software support and extended warranty
programmes.
Geographical split of orders (3 year average)
FY21
% of revenue
Americas 33%
North Asia 33%
Rest of World 34%
The Company's customers are located across the world. As a
result of this global customer base and our distributor network,
there has been an even geographical split of customer orders across
the Company's three key regions in the last three years: the
Americas, North Asia and Rest of the World.
Top 10 customer revenue (average over 3 years)
FY21
% of revenue
Top 10 customer revenues 49%
Other revenues 51%
In FY21, Calnex had 192 revenue generating customers, an
increase of 15 from 177 in FY20.
The Company's top ten customers in FY21 accounted for 49% of
total revenues in the year (FY20: 52%), and 49% on average over the
last three years.
In FY21, no underlying customer accounted for more than 12% of
Calnex's total revenue.
Repeat revenues (average over 3 years)
FY21
% of revenue
Top 10 customer revenues 49%
Other revenues 51%
The average length of customer relationship across the top ten
customers in FY21 is nine years, demonstrating our high levels of
repeat demand from these customers. In addition, the Company
typically experiences a high level of repeat business from its
total customer base. In FY21, 80% of revenues were generated from
existing customers (FY20: 78%).
During the last five years, 176 existing customers have placed
repeat orders with Calnex.
Telecoms v non-telecoms customers
FY21 FY20
% of revenue % of revenue
Telecoms 77% 78%
Non Telecoms 23% 22%
Calnex's sales are predominantly derived from telecoms customers
where the end-application is a telecoms (fixed and mobile) network.
Non-telecoms customers include hyperscale/datacentre and enterprise
customers. These non-telecoms customers represented 23% of the
Company's revenues in FY21 (FY20: 22%).
As telecoms networks evolve, we are finding a number of
companies whose primary business is hyperscale/datacenters and IT
are also moving into the telecoms space. We classify sales to these
non-telecoms companies for use in telecoms applications as telecoms
sales for the purposes of this analysis.
Gross Profit
Gross profit increased to GBP13.9m (FY20: GBP10.6m) as a result
of the strong revenue performance, whilst gross margin was in line
with previous years at 78% (FY20: 77%). Gross margin is calculated
after discounts to channel partners are applied. Gross margins can
fluctuate through the year depending on the mix of products and the
mix of the hardware and software bundles, so can differ slightly
when comparing periods. This variability in product mix is driving
the improvement in gross margin in FY21.
Underlying EBITDA
Underlying EBITDA, which includes R&D amortisation and is
adjusted to exclude discontinued operations in FY20 and IPO costs
and specific share based payments relating to the IPO in FY21,
increased by 32% to GBP5.5m in the year (FY20: GBP4.2m) both as a
result of the strong trading performance and savings of GBP0.4m in
travel and events costs as a result of COVID-19.
Administrative expenses (excluding depreciation &
amortisation), excluding IPO costs, share based payments and
discontinued operations were GBP6.5m in FY21 (FY20: GBP4.8m). The
increase in administrative costs relates to increased staff costs
as we built the teams across the business, higher sales team
commissions as a result of the increased trading performance,
increased foreign exchange costs as the US dollar weakened against
sterling in the later part of the financial year, higher
professional fees and share incentive scheme costs as a result of
being listed on AIM, offset by savings in travel and events costs
as a result of COVID-19.
Amortisation of R&D costs increased by GBP0.3m to GBP2.5m
(FY20: GBP2.2m) as a result of increases in R&D investment in
recent years.
Exceptional costs
Share based payments of GBP0.2m (FY20: GBP0.1m) relate to the
share options in issue prior to the Group's admission to trading on
AIM on 5 October 2020. The vesting of the options was conditional
on a change in control such as a trade sale or initial public
offering and were exercised as a result of the listing on 5 October
2020. As these costs relate to the IPO event they are classed as
one-off in nature and shown as exceptional costs. All share based
payments costs going forward will be included in administrative
costs as a normal cost of the business.
IPO fees incurred during the year were GBP1.1m (on the total
funds raised of GBP22.5m). These are identified as exceptional in
nature in the alternative performance measures for FY21.
On admission to AIM the Company adopted a Share Incentive Plan
(SIP), an HMRC approved all-employee plan that offers the Company
the ability to award equity to employees in a flexible and
tax-advantaged manner. The SIP is open to all UK resident
employees, including executive directors. The Company awarded 2,000
Free Shares under the SIP to all eligible employees to celebrate
the listing on AIM. The cost of this Free Share issue was GBP0.2m
(FY20: nil) and is treated as exceptional in nature.
Adjusted profit before tax
Profit before tax adjusted to exclude IPO costs, share based
payments and discontinued operations was GBP5.1m (FY20: GBP3.6m).
The increase arose from the flow through of strong trading and
lower travel and events costs due to COVID-19.
Tax
The tax charge was GBP0.2m (FY20: GBP0.6m) representing an
effective tax rate of 5.3% (FY20: 23.2%).
The weighted average applicable tax rate for the year was 19%
(FY20: 19%). The difference between the applicable rate of tax and
the effective rate is largely due to the following:
-- Tax relief on exercise of share options by Calnex UK based
employees on IPO on which no deferred tax asset had previously been
recognised (decreasing the effective tax rate by 15.6%);
-- As a result of a comprehensive review of eligible spend for
R&D tax credits in the year, GBP0.5m of R&D expenditure was
established as meeting the qualifying criteria for SME R&D tax
credit relief. This is in relation to projects that were not
covered by grant funding in the year. Although this results in the
RDEC tax credit income of GBP0.3m being flat in the year compared
to FY20, the additional tax credit earned from the SME scheme
provides a 130% enhanced relief against taxable profits resulting
in a 3.4% reduction in effective tax rate. We would expect to
assess the R&D spend for this same split across grant funded
and non-grant funded projects in future years; and
-- Permanent differences such as IPO costs which are disallowed
for tax purposes (increasing the effective rate by 5.3%)
Earnings per share
Adjusted basic earnings per share was 5.83 pence in the year
(FY20: 4.58 pence) and Adjusted diluted earnings per share was 5.21
pence (FY20: 3.66 pence).
The Company's Ordinary Shares were admitted to the AIM market of
the London Stock Exchange on 5 October 2020.
As at 31 March 2020, the Company had 248,135 Ordinary Shares in
issue. To prepare for listing on AIM, the Company's share capital
was reorganised in September 2020 through bonus issues of shares
and a share split, taking the total number of Ordinary Shares in
issue to 60,024,103.
Immediately prior to admission, 14,975,897 Ordinary Shares were
issued to option and warrant holders, taking the total Ordinary
Shares in issue prior to admission to 75,000,000.
12,500,000 new Ordinary Shares were issued and placed on
admission, taking the total share capital in issue immediately
following the placing to 87,500,000 Ordinary Shares of 0.125p
each.
The weighted average number of shares as at 31 March 2020
reflects a position as though the total number of Ordinary Shares
of 60,024,103 (and outstanding share options and warrants of
14,975,897) were in issue for the year ended 31 March 2020. This
retrospective treatment for the FY20 comparatives is required
because there was no corresponding change in the Company's economic
resources as a result of the share capital reorganisation which
took place in September 2020. The weighted average number of shares
for the comparative period is therefore 60,024,103 for basic
earnings per share and 75,000,000 for diluted earnings per
share.
The weighted average number of shares in issue at 31 March 2021
takes into account the 12,500,000 new shares issued and 2,650,000
new share options issued as at 5 October 2020 as a result of the
IPO:
Basic weighted Diluted
Share options average weighted
Shares (No.) Weighting (No.) average
(No.) (months) (No.)
Share capital
pre IPO 60,024,103 14,975,897 6/12 30,012,052 37,500,000
Share capital
post IPO 87,500,000 2,650,000 6/12 43,750,000 45,075,000
--------------- -----------
73,762,052 82,575,000
Adjusted EPS excludes discontinued operations, IPO costs
(including IPO related share based payments) and the tax effect of
these adjustments.
Earnings per share: Year ended Year ended
31 March 31 March
2021 2020
GBP000
Profit after tax 3,453 2,287
Adjusted for:
Discontinued operations - 500
IPO exceptional costs 1,421 -
Tax relief on share option exercise (570) -
Total adjusted profit after tax 4,304 2,787
Weighted average number of ordinary shares:
Basic earnings per share 73,762 60,024
Diluted earnings per share 82,575 75,000
Earnings per share
Basic earnings per share 4.68 3.81
Diluted earnings per share 4.18 3.05
Adjusted basic earnings per share 5.83 4.58
Adjusted diluted earnings per share 5.21 3.66
Cashflows
As a result of the IPO and the strong trading performance in the
year, the Group generated GBP9.0m cash in FY21 compared with
GBP1.8m cash generated in FY20.
Net cash generated from operations was GBP9.0m in the year
(FY20: GBP5.5m), representing 138% of EBITDA conversion to cash
(FY20: 95%).
Cash used in investing activities is predominantly cash spent on
R&D activities which is capitalised and amortised over five
years. Cash spend on R&D in the year was GBP3.3m (FY20:
GBP2.9m).
Cash earned on financing activities in the year was GBP3.3m
(FY20: cash spend of GBP0.8m), largely driven by the monies raised
as a result of the Company's admission to AIM. The total proceeds
raised from the placing undertaken alongside admission was
GBP22.5m, which comprised 34,375,000 shares sold on behalf of
existing shareholders to raise GBP16.5m and 12,500,000 new shares
issued to raise GBP6.0m (before expenses) for the Company. GBP0.3m
cash was also raised as a result of the exercise of share
options.
Total IPO fees were GBP1.1m, leaving net cash raised by the
Company of GBP4.9m.
The outstanding balance on the term loan of GBP1.9m was redeemed
in full on 6 October 2020 after the Group's admission to trading on
AIM on 5 October 2020. On 6 November 2020, a GBP3.0m Revolving
Credit Facility was put in place and is currently undrawn.
The Company also received GBP0.6m in grant funding from Scottish
Enterprise in FY21 (FY20: GBP0.1m). GBP0.5m of this cash was
received in advance and will be recognised as income over the next
five years.
Closing cash at 31 March 2021 was GBP12.7m (31 March 2020:
GBP3.7m), which gives us a strong financial base to take us forward
into FY22.
Ashleigh Greenan
Chief Financial Officer
24 May 2021
Consolidated statement of comprehensive income
__________________________________________________________________________________________________________________
Year ended Year ended
31 March 31 March
2021 2020
Note GBP'000 GBP'000
Revenue 5 17,978 13,739
Cost of sales (4,013) (3,116)
---------- ----------
Gross profit 13,965 10,623
Other income 6 530 549
Administrative expenses 7 (10,693) (7,852)
---------- ----------
Operating profit 3,802 3,320
Finance costs 11 (155) (339)
---------- ----------
Profit before taxation 3,647 2,981
Taxation 12 (194) (694)
---------- ----------
Profit and total comprehensive
income for the year 3,453 2,287
========== ==========
Profit and total comprehensive
income for the year attributable
to:
Continuing operations 3,453 2,787
Discontinued operations 8 - (500)
---------- ----------
3,453 2,287
========== ==========
Basic earnings per share 24 4.68 3.81
Diluted earnings per share 24 4.18 3.05
Consolidated statement of financial position
__________________________________________________________________________________________________________________
31 March 31 March
2021 2020
GBP'000 GBP'000
Non-current assets Note
Intangible assets 13 7,525 6,779
Plant and equipment 14 22 21
Right-of-use assets 20 522 660
Deferred tax asset 21 613 554
--------
8,682 8,014
Current assets
Inventories 15 1,111 958
Trade and other receivables 16 1,819 2,505
Cash and cash equivalents 17 12,668 3,628
--------
15,598 7,091
Total assets 24,280 15,105
--------
Current liabilities
Borrowings 18 - 695
Trade and other payables 19 4,181 3,042
Lease liabilities 20 130 122
Financial liabilities 23 - 117
Provisions 22 291 289
--------
4,602 4,265
Non-current liabilities
Borrowings - 1,581
Trade and other payables 19 749 555
Lease liabilities 20 436 554
Deferred tax liabilities 21 1,321 1,188
Provisions 22 15 15
2,521 3,893
Total liabilities 7,123 8,158
Net assets 17,157 6,947
======== ========
Equity
Share capital 109 25
Share premium 7,484 1,138
Share option reserve 126 69
Retained earnings 9,438 5,715
Total equity 17,157 6,947
======== ========
Consolidated statement of changes in equity
__________________________________________________________________________________________________________________
Share
Share Share option Retained Total
capital premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March 2019 25 1,138 14 3,481 4,658
Share options - - 55 - 55
Total comprehensive income for
the year - - - 2,288 2,343
Balance at 31 March 2020 25 1,138 69 5,769 7,001
Issue of shares 16 5,984 - - 6,000
Share options 18 362 57 266 703
Bonus share issue 50 - - (50) -
Total comprehensive income for
the year - - - 3,453 3,453
Balance at 31 March 2021 109 7,484 126 9,438 17,157
Consolidated cash flow statement
__________________________________________________________________________________________________________________
31 March 31 March
2021 2020
GBP'000 GBP'000
Cashflows from operating
activities
Profit before tax from continuing
operations 3,647 3,481
Adjusted for:
IPO professional fees and
commissions 1,057 -
Finance costs 155 339
Foreign exchange differences (65) (94)
Government grant income (204) (220)
R&D tax credit income (326) (329)
Change in fair value of assets
and liabilities 144 192
Movement in obsolescence
provision 25 5
Movement in provisions (14) 44
Share based payment transactions 275 55
Depreciation 167 147
Amortisation 2,585 2,322
Movement in inventories (178) (191)
Movement in trade and other
receivables 818 (356)
Movement in trade and other
payables 1,271 707
Net cash used in discontinued
operations (201) (299)
--------
Cash generated from operations 9,156 5,803
Interest paid (107) (278)
Net cash from operating activities 9,049 5,525
Investing activities
Purchase of intangible assets (3,332) (2,911)
Purchase of property and
equipment (10) (30)
-------- --------
Net cash used in investing
activities (3,342) (2,941)
======== ========
Financing activities
Repayment of borrowings (2,276) (298)
Payment of lease obligations (193) (163)
Share issue proceeds 6,000 -
Share options proceeds 328 -
IPO professional fees and
commissions (1,057) -
Payment of deferred consideration (83) (414)
Government grant income 578 73
-------- --------
Net cash from financing activities 3,297 (802)
======== ========
Net increase in cash and
cash equivalents 9,004 1,782
Cash and cash equivalents
at beginning of the year 3,664 1,852
Foreign exchange movements - 30
-------- --------
Cash and cash equivalents
at end of the year 12,668 3,664
======== ========
Notes to the financial information
____________________________________________________________________________________________________________
1. General information
Calnex Solutions plc ("the Company") is a public limited company
domiciled and incorporated in Scotland. The registered office is
Oracle Campus, Linlithgow, West Lothian, EH49 7LR.
The Company (together with its subsidiaries, the "Group") were
under the control of the directors throughout the period covered in
the financial information. The list of the subsidiaries
consolidated in the financial information are shown in Note 27.
The principal activity of the Group is the design, production
and marketing of test instrumentation and solutions for network
synchronisation and network emulation.
The financial information was authorised for issue, in
accordance with a resolution of directors, on 24 May 2021. The
directors have the power to amend and reissue the financial
information.
2. Basis of preparation
a) Financial information
The financial information set out herein does not constitute a
statutory set of accounts as defined in Section 434 of the
Companies Act 2006. The financial information for the year ended 31
March 2021 has been extracted from the Group's audited financial
statements which were approved by the Board of Directors on 24 May
2021, received an unqualified audit opinion, and which, if adopted
by the members at the Annual General Meeting, will be delivered to
Companies House.
b) Basis of accounting
The financial information has been prepared under the historical
cost convention, except for certain financial assets and
liabilities including financial instruments, which are stated at
their fair values.
The preparation of the financial information in conformity with
IFRS requires the directors to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expense. The
estimates and judgements are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about carrying amounts of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates. The accounting policies set out below
have, unless otherwise stated, been applied consistently to all
periods presented.
These consolidated financial information is the first published
consolidated financial information of Calnex Solutions plc prepared
in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006. The consolidated
financial statements of Calnex Solutions plc were previously
prepared in accordance with UK GAAP.
c) Functional and presentation currency
The financial information is presented in pounds Sterling, which
is the functional and presentation currency of the Group. Results
in this financial information have been prepared to the nearest
thousand.
d) Basis of consolidation
The consolidated financial information incorporates those of
Calnex Solutions plc, and all its subsidiaries. A subsidiary is an
entity controlled by the Group, i.e. the Group is exposed to, or
has the rights, to variable returns from its involvement with the
entity and has the ability to affect those returns through its
current ability to direct the entity's relevant activities (power
over the investee).All intra-Group transactions, balances, and
unrealised gains on transactions between Group companies are
eliminated on consolidation. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the
asset transferred. The total comprehensive income, assets and
liabilities of the entities are amended, where necessary to align
the accounting policies.
The Group applies the acquisition method to account for all
acquired businesses, whereby the identifiable assets acquired and
the liabilities assumed are measured at their acquisition date fair
values (with a few exceptions as required by IFRS 3 Business
Combinations).
The cost of a business combination is the fair value at the
acquisition date of the assets given, equity instruments issued and
liabilities incurred or assumed, plus costs directly attributable
to the business combination. The excess of the cost of a business
combination over the fair value of the identifiable assets,
liabilities and contingent liabilities is recognised as
goodwill.
The acquisition of assets that falls outside the scope of IFRS 3
are accounted for by bringing the assets and liabilities of the
acquired entity into the financial information at their nominal
value from the date of acquisition. Comparative information is not
restated.
e) Adoption of new and revised standards
New standards, amendments to standards and interpretations which
came into effect for accounting periods starting on or after
1 January 2020 and have had an impact on the financial
information are as follows:
Amendments to IFRS 3 'Business Combinations' (effective where
the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after 1 January 2020) -
makes amendments to clarify the definition of a business to help
companies determine whether an acquisition is of a business or a
group of assets. The amendments are expected to result in more
acquisitions being accounted for as asset acquisitions. As detailed
in note (3e) careful consideration is given to the accounting
treatment for each acquisition. Most acquisitions made by the Group
are treated as the acquisition of a group of assets, so the
amendments to this standard have not had any impact on the
financial information.
Amendments to IAS 1 'Presentation of Financial Statements' and
IAS 8 'Accounting Policies, Changes in Accounting Estimates and
Errors' (effective for annual periods beginning on or after 1
January 2020) - make amendments to clarify the definition of
'material'. The amendments make IFRSs more consistent but are not
expected to have a significant impact on the preparation of the
financial information.
Amendments to IFRS16 'Leases' (effective from June 2020 onwards)
- were issued in response to the COVID-19 pandemic to address
accounting treatment for rent concessions granted to lessees as a
direct result of the pandemic. The Group has not received any rent
concessions for its land and buildings leases and therefore
accounting treatment has not been affected.
f) Going concern
The financial information for the year to 31 March 2021 has been
prepared on the basis that the Company will continue as a going
concern.
The business has not seen any detrimental impact on trading as a
result of the COVID-19 pandemic and the Group has not required the
assistance of government funding to date. Appropriate safety
measures have been put in place to protect staff while the Group
continues to operate adhering to government advice on stay at home
directives across our various locations. The directors continue to
closely monitor the situation, with rolling cashflow forecasting
and visibility over the order pipeline being key to provide early
indication of required action in order to mitigate against any
future risk of further lockdowns or new virus threats.
The Board has approved financial profit and cashflow forecasts
for the current and succeeding financial years to 31 March 2023.
Based on this review, along with regular oversight of the Company's
risk management framework, the Board has concluded that given the
Company's cash reserves available and access to additional
liquidity through banking facilities the Company will continue to
trade as a going concern.
3. Significant accounting policies
(a) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
and services provided in the normal course of business, net of
sales related taxes and discounts and is recognised at the point in
time when the relevant performance obligation is satisfied.
Where revenue contracts have multiple elements, all aspects of
the transaction are considered to determine whether these elements
can be separately identified. Where transaction elements can be
separately identified and revenue can be allocated between them on
a fair and reliable basis, revenue for each element is accounted
for according to the relevant policy below. Where transaction
elements cannot be separately identified, revenue is recognised
over the contract period.
The Group recognises revenue from the following major
sources:
Hardware & software revenue
Revenue from the sale of hardware and bundled software, is
recognised when the Group transfers the risk and rewards to the
customer. Each unit sale comes with a standard warranty period
during which the Group agrees to provide warranty cover,
maintenance cover and software upgrade cover in the event of any
software upgrades being released. This is recognised as a
separately identifiable obligation from the provision of the
hardware and is recognised over the life of the cover provided,
being a year.
For the sale of stand-alone software, the licence period and
therefore the revenue recognition, commences upon delivery.
Extended warranty programme
The Group enters into agreements with purchasers of its
equipment to perform necessary repairs falling outside the Group's
standard warranty period. As this service involves an indeterminate
number of acts, the Group is required to 'stand ready' to perform
whenever a request falling within the scope of the program is made
by a customer. Revenue is recognised on a straight-line basis over
the term of the contract.
This method best depicts the transfer of services to the
customer as:
i) The Group's historical experience demonstrates no
statistically significant variation in the quantum of services
provided in each year of a multi-year contract
ii) no reliable prediction can be made as to if and when any
individual customer will require service.
Software support programme
The Group enters into agreements with purchasers of its
equipment to provide software support and access to future software
updates. Revenue is recognised on a straight-line basis over the
term of the contract.
Grant income
The Group obtains grant funding from the Scottish Government in
the form of reimbursement for research and development costs
eligible for reclaim under the grant agreement. Costs are incurred
before they can be reclaimed under the grant agreement and revenue
is only recognised after receipt of the funds from the government.
Grant funds received are recognised over five years, in line with
the amortisation policy on capitalised research and development
costs.
(b) Retirement benefit costs
Payments to defined contribution schemes are charged to the
income statement as an expense as they fall due.
(c) Share based payments
Equity-settled share-based compensation benefits are provided to
some employees. Equity-settled transactions are awards of shares,
or options over shares that are provided to employees in exchange
for the rendering of services.
The cost of equity-settled transactions are measured at fair
value on grant date. Fair value is independently determined using
the Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the
share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free
interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the Group receives the
services that entitle the employees to receive payment. There are
no other vesting conditions.
The cost of equity-settled transactions are recognised as an
expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based
on the grant date fair value of the award, the best estimate of the
number of awards that are likely to vest and the expired portion of
the vesting period. The amount recognised in profit or loss for the
period is the cumulative amount calculated at each reporting date
less amounts already recognised in previous periods.
All changes in the liability are recognised in profit or
loss.
If equity-settled awards are modified, as a minimum an expense
is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting
period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of
modification.
If the non-vesting condition is within the control of the Group
or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the
Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the
remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it
has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is
substituted for the cancelled award, the cancelled and new award is
treated as if they were a modification.
(d) Taxation
The tax expense represents the sum of the current tax and
deferred tax charge for the year.
The tax currently payable is based on taxable profit for the
year. The Group's liability for current tax is calculated using the
tax rates that have been enacted or substantively enacted by the
balance sheet date.
Deferred tax is measured on differences between the carrying
amounts of assets and liabilities in the financial information and
the corresponding tax bases, as used in the computation of taxable
profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available. Such assets and liabilities are not recognised
if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of
financial assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when the relevant
requirements of IAS 12 are satisfied.
(e) Business Combinations
The acquisition method of accounting is used to account for
business combinations regardless of whether equity instruments or
other assets are acquired.
The consideration transferred is the sum of the acquisition-date
fair values of the assets transferred, equity instruments issued or
liabilities incurred by the Group to former owners of the acquire.
All acquisition costs are expensed as incurred to profit or
loss.
On the acquisition of a business, the Group assesses the
financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual
terms, economic conditions, the Group's operating or accounting
policies and other pertinent conditions in existence at the
acquisition-date.
Contingent consideration to be transferred by the acquirer is
recognised at the acquisition-date fair value. Subsequent changes
in the fair value of the contingent consideration classified as an
asset or liability is recognised in profit or loss.
The difference between the acquisition-date fair value of assets
acquired and liabilities assumed and the fair value of the
consideration transferred is recognised as goodwill. If the
consideration transferred is less than the fair value of the
identifiable net assets acquired, a bargain purchase is recognised
as a gain directly in profit or loss by the Group on the
acquisition-date.
Business combinations are initially accounted for on a
provisional basis. The Group retrospectively adjusts the
provisional amounts recognised and also recognises additional
assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed
at the acquisition-date. The measurement period ends on either the
earlier of (i) 12 months from the date of the acquisition or (ii)
when the acquirer receives all the information possible to
determine fair value.
(f) Intangible assets
Intangible assets acquired as part of a business combination,
other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately
are initially recognised at cost. Indefinite life intangible assets
are not amortised and are subsequently measured at cost less any
impairment. Finite life intangible assets are subsequently measured
at cost less amortisation and any impairment. The method and useful
lives of finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption or useful life are
accounted for prospectively by changing the amortisation method or
period.
Research costs are expensed in the period in which they are
incurred. Development costs are capitalised when it is probable
that the project will be a success considering its commercial and
technical feasibility; the Group is able to use or sell the asset;
the Group has sufficient resources and intent to complete the
development; and its costs can be measured reliably. Capitalised
development costs are amortised on a straight-line basis over the
period of their expected benefit, being their finite life of 5
years.
Significant costs associated with patents and trademarks are
deferred and amortised on a straight-line basis over the period of
their expected benefit, being their finite life of 10 years.
Amortisation is charged to administrative expenses in the Statement
of Comprehensive Income.
Goodwill and other intangible assets that have an indefinite
useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other
non-financial assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less
costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset
using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a
cash-generating unit.
(g) Financial assets
Where there is no publicly quoted market value, other
investments, including subsidiaries, are shown at cost less
provisions for impairment.
(h) Plant and equipment
Plant and equipment are shown at cost, net of depreciation and
any provision for impairment. Depreciation is provided on all
property, plant and equipment at varying rates calculated to write
off cost less residual value over the useful lives. Depreciation is
charged to administrative expenses in the Statement of
Comprehensive Income. The principal rates employed are:
Plant and machinery 25-33% straight line
The carrying values of property, plant and equipment are
reviewed for impairment when events or changes in circumstances
indicate these values may not be recoverable. If there is an
indication that impairment does exist, the carrying values are
compared to the estimated recoverable amounts of the assets
concerned.
The recoverable amount is the greater of an asset's value in use
and its fair value less the cost of selling it. Value in use is
calculated by discounting the future cash flows expected to be
derived from the asset. Where the carrying value of an asset
exceeds its recoverable amount, the asset is considered impaired
and is written down through the income statement to its recoverable
amount.
An item of property, plant and equipment is written off either
on disposal or when there is no expected future economic benefit
from its continued use. Any gain or loss (calculated as the
difference between the net disposal proceeds and the carrying value
of the asset) is included in the income statement in the year.
The Group has elected not to recognise a right-of-use asset and
corresponding lease liability for short-term leases with terms of
12 months or less and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss as incurred.
(h) Right-of-use assets
A right-of-use asset is recognised at the commencement date of a
lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as
applicable, any lease payments made at or before the commencement
date net of any lease incentives received, any initial direct costs
incurred, and, except where included in the cost of inventories, an
estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis
over the unexpired period of the lease or the estimated useful life
of the asset, whichever is the shorter. Where the Group expects to
obtain ownership of the leased asset at the end of the lease term,
the depreciation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any re-measurement
of lease liabilities.
(i) Inventories
Inventories are valued at the lower of cost and net realisable
value. In determining the cost of raw materials, consumables and
goods for resale, the average purchase price is used. For work in
progress and finished goods, cost is taken as production cost which
includes an appropriate proportion of overheads.
Inventories are assessed for indicators of impairment at each
year end and where a provision is required the income statement is
charged directly
(j) Trade and other receivables
Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses.
The simplified approach to measuring expected credit losses has
been applied, this uses a lifetime expected loss allowance. To
measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any
allowance for expected credit losses.
(k) Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include
cash in hand, deposits held at call with banks, other short-term
liquid investments with original maturities of 95 days or less, and
bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities
(l) Borrowings
Interest-bearing loans and bank overdrafts are initially
recorded at the fair value of proceeds received and are
subsequently stated at amortised cost. Finance charges, including
premiums payable on settlement or redemption and direct issue
costs, are accounted for on an accruals basis in the income
statement using the effective interest method and are added to the
carrying amount of the instrument to the extent that they are not
settled in the period in which they arise.
(m) Trade and other payables
Trade payables are non-interest-bearing and are measured at
amortised cost.
(n) Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation arising as a result of a past event, it is
probable that an outflow of economic benefits will be required to
settle the obligation and a reliable estimate can be made.
Provisions are measured at the present value of the expenditure
expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the
provision due to the passage of
time is recognised as an interest expense.
The fair value of Company equity is included in the initial
recognition of warrants as a financial liability. The cost of
equity-settled transactions are measured at fair value on grant
date. Fair value is independently determined using the
Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the
share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free
interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the Group receives the
services that entitle the employees to receive payment.
(o) Financial liabilities
Financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions
of that instrument.
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently
re-measured to their fair value at each reporting date. The changes
in fair value are recorded in the statement of comprehensive
income.
The Company recognises warrants in issue as financial
liabilities and re-measures them whenever the terms of the warrants
are changed, with any gain or loss recognised in the profit or
loss.
(p) Lease liabilities
A lease liability is recognised at the commencement date of a
lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. The lease term is the non-cancellable period of the
lease plus extension periods that the group is reasonably certain
to exercise and termination periods that the group is reasonably
certain not to exercise. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when
the exercise of the option is reasonably certain to occur, and any
anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in
which they are incurred.
Lease liabilities are measured at amortised cost using the
effective interest method. The carrying amounts are re-measured if
there is a change in the following: future lease payments arising
from a change in an index or a rate used; residual guarantee; lease
term; certainty of a purchase option and termination penalties.
When a lease liability is re-measured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written
down.
(q) Foreign currency
In preparing the financial information of individual companies,
transactions in currencies other than pounds sterling are recorded
at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are translated to sterling at the foreign
exchange rate ruling at that date. Exchange differences arising on
translation are recognised in the consolidated income statement for
the period.
Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated at the
rates prevailing at the dates when the fair value was determined.
Non-monetary assets and liabilities that are measured at historical
cost in a foreign currency (e.g. property, plant and equipment
purchased in a foreign currency) are translated using the exchange
rate prevailing at the date of the transaction. Exchange
differences arising on the translation of net assets are affected
through the Statement of Comprehensive Income.
For the purpose of presenting consolidated financial
information, the assets and liabilities of the Group's foreign
operations are translated at exchange rates prevailing on the
balance sheet date. Income and expense items are translated at the
average exchange rates for the period and recognised in the
Statement of Comprehensive Income.
(r) Dividends
Dividends are recognised when declared during the financial
year. The declaration of dividends is at the discretion of the
Group directors.
(s) Value Added Tax
Revenues, expenses and assets are recognised net of the amount
of associated VAT, unless the VAT incurred is not recoverable from
the tax authority. In this case it is recognised as part of the
cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of
VAT receivable or payable. The net amount of VAT recoverable from,
or payable to, the tax authority is included in other receivables
or other payables in the statement of financial position.
Commitments and contingencies are disclosed net of the amount of
VAT recoverable from, or payable to, the tax authority.
(t) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the shareholders, excluding any costs of servicing
equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the financial
year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account
dilutive potential ordinary shares and the weighted average number
of shares assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
(u) Critical judgements in applying the Groups accounting estimates
In the process of applying the Group's accounting policies, the
directors have made the following judgements that have the most
significant effect on the amounts recognised in the financial
information.
Business combinations
The Group's policies require that a fair value be attributed to
the assets and liabilities of an acquired business, including
internally developed assets that may not be recognised by the
acquired business, at the date of acquisition. The directors use
their judgement to identify the separate intangible assets and then
determine a fair value for each based upon the nature of the asset,
industry statistics, future potential and other relevant
factors.
Any consideration provided including deferred or contingent
consideration is recognised at fair value at the date of
acquisition. The directors have made estimates regarding the fair
value of equity instruments transferred.
Share based payment transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined
by using the Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact
profit or loss and equity.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires
a degree of estimation and judgement. The level of the provision is
assessed by taking into account the recent sales experience, the
ageing of inventories and other factors that affect inventory
obsolescence.
Impairment
Determining whether any non-current asset has been impaired
requires an estimation of the value in use of the cash generating
units to which these assets are allocated. The value in use
calculation requires the Group to identify appropriate cash
generating units, to estimate the future cash flows expected to
arise from each cash generating unit and a suitable discount rate
in order to calculate present value. Impairment exercises on fixed
tangible assets, goodwill and indefinite life intangible assets
have been undertaken each year presented.
Useful lives
The Group uses forecast cash flow information and estimates of
future growth to assess whether goodwill and other intangible fixed
assets are impaired, and to determine the useful economic lives of
its goodwill and intangible assets. If the results of operations in
a future period are adverse to the estimates used a reduction in
useful economic life may be required.
(v) Discontinued operation
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which represents a separate major
line of business or geographical area of operations, or is a single
coordinated plan to dispose of a separate major line of business or
geographical area of operations, or is a subsidiary acquired
exclusively with a view to resale. Classification as a discontinued
operation occurs upon disposal or when the operation meets the
criteria to be classified as held for sale, if earlier.
(w) New and revised IFRS' in issue but not yet effective
A number of new standards, amendments to standards and
interpretations are effective for periods beginning on or after 1
January 2021 and have not been applied in preparing this financial
information. These are:
Interest Rate Benchmark Reform-Phase 2: Amendments to IFRS 9
'Financial Instruments', IAS 39 'Financial Instruments; Recognition
and Measurement', IFRS 7 'Financial Instruments: Disclosures', IFRS
4 'Insurance Contracts' and IFRS 16 'Leases' (effective for periods
beginning on or after 1 January 2021) These amendments address
issues that might affect financial reporting when an existing
interest rate benchmark is replaced with an alternative benchmark
interest rate. The amendments are not expected to have a
significant impact on the preparation of the financial
information.
Amendments to IFRS 3 'Business Combination s' (effective for
periods beginning on or after 1 January 2022) - gives clarification
on the recognition of contingent liabilities at acquisition and
clarifies that contingent assets should not be recognised at the
acquisition date. The amendments are not expected to have a
significant impact on the preparation of the financial
information.
Amendments to IAS 1 'Presentation of Financial Statements'
(effective for periods beginning on or after 1 January 2023) -
clarifies that liabilities are classified as either current or
non-current, depending on the rights that exist at the end of the
reporting period and not expectations of or actual events after the
reporting date. The amendments also give clarification to the
definition of settlement of a liability. The amendments are not
expected to have a significant impact on the preparation of the
financial information.
4 Operating Segments
Operating segments are based on the internal reports that are
reviewed and used by the Board (who are identified as the Chief
Operating Decision Makers) in assessing performance and determining
the allocation of resources. As the Group has a central cost
structure and a central pool of assets and liabilities the Board
does not consider segmentation in their review of costs or the
statement of financial position. The only operating segment
information reviewed, and therefore disclosed, are the revenues
derived from different geographies.
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Americas 5,767 4,079
North Asia 5,945 6,788
Rest of World 6,266 2,872
17,978 13,739
======== ========
5 Revenue
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Sale of goods 16,509 12,473
Rendering of services 1,469 1,266
Total revenue 17,978 13,739
Revenue from the
sale of goods from:
Continuing operations 16,509 12,348
Discontinued operations - 125
16,509 12,473
============= ========
72% (2020: 71%) of the Group's orders in the year were
distributed by the Group's principal distribution partner. Included
within revenue is an amount of GBP2,144,773 (2020: GBP1,081,059)
which arose from sales to the Groups largest customer, and was
geographically spread as follows: Americas GBP1,079,534 (2020:
GBP585,130), N Asia: GBP138,348 (2020: GBPnil), ROW: GBP926,891
(2020: GBP495,929). This is the only customer to exceed 10% of the
Group's revenue.
6 Other income
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Government grant
income 204 220
R&D tax credit 326 329
530 549
======== ========
7 Material operating profit items
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Operating profit for the year is stated after
charging/(crediting):
IPO related professional fees and commissions 1,057 -
Issue of free shares to employees 166 -
Low value asset lease
payments 42 38
Depreciation of right-of-use
assets 158 125
Depreciation of tangible
assets 9 22
Amortisation of intangible
assets 2,585 2,322
Foreign exchange differences (65) (94)
Fair value loss/(gain)
on financial instruments 144 193
Provision for inventory
obsolescence 26 6
Other provisions (14) 44
Share based payments 275 55
--------
Auditors remuneration
Fees payable to the Group's auditor and its associates
for the audit of the Group's annual accounts 35 26
Fees payable to the Group's auditor and its associates - -
for the audit of the Company's subsidiaries
Total fees payable
for audit services 35 26
Fees payable to the Group's auditor and its associates
for other services:
Audit related services - -
Tax related services - 3
Other services 151 4
Total fees payable to the Group's auditor and
its associates 186 33
-------- --------
8 Discontinued operations
On 6 May 2019, the Company acquired the trade and assets of
small German-based business, Luceo Technologies, with the objective
of entering the component and module test market. It was
subsequently established that the development and investment period
would be longer than anticipated and the decision was taken in the
prior accounting period to cease operations to deploy resources
more optimally within the core parts of the Group.
Calnex Solutions (Berlin) GmbH was put into liquidation from 31
Dec 2019. On 18 March 2020 the Group submitted an order for
dissolution for its subsidiary, Calnex Solutions (Berlin) Limited
(incorporated in April 2019) which was subsequently dissolved on 22
Sep 2020.
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Revenue - 125
Cost of sales - (82)
--------
Gross profit - 43
Administrative expenses - (543)
Finance costs - -
Loss before tax from discontinued
operations - (500)
======== ========
Net decrease in cash and cash equivalents
from discontinued operations (201) (299)
9 Employee benefits costs
Average monthly number of employees
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Development staff 58 48
Administrative staff 33 27
Management staff 9 7
100 82
--------
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Employee costs during
the year
(including directors
remuneration) amounted
to:
Wages and salaries 4,148 3,571
Social security costs 586 473
Defined contribution
pension 212 150
Share incentive scheme 215 -
Equity-settled share
based payment 275 55
--------
5,436 4,249
======== ========
10 Key management personnel emoluments
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Wages and salaries 654 604
Social security costs 58 40
Defined contribution
pension 6 -
Equity-settled share
based payment 91 22
--------
809 666
-------- --------
Gains made on share options converted
by directors in the year 613 -
--------
The number of directors who accrued benefits
under the company pension plans
Defined contribution plans 1 -
-------- --------
Remuneration of the highest paid
director in respect of qualifying
services:
Aggregate remuneration 184 345
-------- --------
11 Finance costs
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Interest expense for borrowings
at amortised cost 107 278
Interest expense on lease
liabilities 63 26
Unwinding of discount on
deferred consideration (15) 35
155 339
======== ========
12 Taxation
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Current taxation
UK corporation tax on
profits for the year 67 497
Foreign current tax expense 12 35
Adjustments relating
to prior years (9) -
70 532
Deferred taxation
Origination and reversal
of temporary differences 61 162
Adjustments relating
to prior periods 63 -
124 162
Total taxation charge 194 694
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Profit before tax for
the year 3,647 2,981
======== ========
Tax thereon at 19% 693 566
Effects of:
Expenses disallowable
for tax purposes 196 8
Adjustments in respect of prior periods
- current tax (9) -
Adjustments in respect of prior periods
- deferred tax 64 -
Movement in unprovided deferred tax
related to share options (573) -
Movement in unprovided deferred tax related
to timing differences now recognised (54) 38
SME R&D credit (123) 25
Overseas tax - 57
Effect of non-UK losses -
Taxation charge 194 694
======== ========
The weighted average applicable tax rate for the year ended 31
March 2021 was 19% (2020: 19%). The effective rate of tax for the
year, based on the taxation charge for the year as a percentage of
the profit is 5.29% (2020: 23.24%) The difference between the
applicable rate of tax and the effective rate is largely due to the
following:
-- Tax relief on exercise of share options on IPO on which no
deferred tax asset had previously been recognised on (impacts ETR
by decreasing 15.64%)
-- Availability of R&D SME enhanced deduction which had not
been claimed in prior period (impacts ETR by decreasing 3.36%)
-- This is partly offset by permanent differences such IPO costs
which are disallowed for tax purposes (impacts ETR by increasing
5.32%)
13 Intangible assets
Included within intangible assets are the following significant
items:
-- Cost of patent applications and on-going patent maintenance fees.
-- Capitalised development costs representing expenditure
relating to technological advancements on the core product base of
the Group. These costs meet the requirement of IAS 38 (Intangible
Assets) and will be amortised over the future commercial life of
the related product. Amortisation is charged to administrative
expenses.
Intellectual Development Group
property costs Total
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2020 2,343 23,732 26,075
Additions 5 3,326 3,331
Disposals - (2,620) (2,620)
At 31 March 2021 2,348 24,438 26,786
-------
Amortisation
At 1 April 2020 2,034 17,262 19,296
Charge for the year 106 2,479 2,585
Eliminated on disposal - (2,620) (2,620)
At 31 March 2021 2,140 17,121 19,261
Net book value
31 March 2020 309 6,470 6,779
31 March 2021 208 7,317 7,525
During the year, a review of the carried development costs
brought forward has resulted in a disposal of GBP2,620,117 , and
elimination of amortisation of GBP2,620,117 resulting in a net book
value impact of GBPnil. This reflects removal of aged spend on
product features that are now considered to be superseded by
current product developments.
14 Plant and equipment
The Group annually reviews the carrying value of tangible fixed
assets taking recognition of the expected working lives of the
plant and equipment available to the Group and known requirements.
Depreciation is charged to administrative expenses.
Plant
and
equipment
Total
GBP'000
Cost
At 1 April 2020 167
Additions 10
Disposals (58)
At 31 March 2021 119
---------
Depreciation
At 1 April 2020 146
Charge for the year 9
Eliminated on disposal (58)
At 31 March 2021 97
---------
Net book value
31 March 2020 21
=========
31 March 2021 22
15 Inventories
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Finished goods 1,390 1,211
Provision for obsolescence (279) (253)
1,111 958
======== ========
Cost of inventories recognised
as an expense 3,591 2,793
Group inventories reflect the following movement in provision
for obsolescence:
At start of the financial
year 253 247
Utilised (98) (133)
Provided 124 139
At end of the financial
year 279 253
==== =====
16 Trade and other receivables
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Amounts due within one
year
Trade receivables 988 1,962
Provision for bad debt - (16)
Other receivables 700 468
Amounts owed by group - -
companies
Prepayments and accrued
income 131 94
1,819 2,508
======== ========
Trade receivables are consistent with trading levels across the
Group and are also affected by exchange rate fluctuations.
No interest is charged on the trade receivables. The Group has
reviewed for estimated irrecoverable amounts in accordance with its
accounting policy.
The Group's credit risk is primarily attributable to its trade
and other receivables. Management has a credit policy in place and
the exposure to credit risk is monitored on an ongoing basis.
Credit evaluations are performed on customers as appropriate to the
level of credit extended. In addition, credit insurance would be
sought for major areas of exposure, although this has not been
required in the year under review.
The Group reviews trade receivables past due but not impaired on
a regular basis and considers, based on experience, that the credit
quality of these amounts at the balance sheet date has not
deteriorated since the date of the transaction.
Included in the Group's trade receivable balance are debtors
with a carrying amount of GBP78,664 (2020: GBP72,534), which are
past due at the reporting date but for which the Group has not
provided against, as there has not been a significant change in
credit quality and the Group believes that the amounts are still
recoverable.
Ageing of past due but not impaired trade receivables
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Overdue by
0-30 days 46 9
30-60 days 32 -
60+ days - 63
78 72
The Directors consider that the carrying amount of trade and
other receivables approximates their fair value.
Note 24 includes disclosures relating to the credit risk
exposures and analysis relating to the allowance for expected
credit losses. The calculated credit risk is GBP3,221. Due to the
immaterial nature of the balance, no provision has been
recognised.
17 Cash and cash equivalents
Cash and cash equivalent amounts included in the Consolidated
Statement of Cashflows comprise the following:
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Cash at bank 7,668 3,664
Cash on short term deposit 5,000 -
12,668 3,664
Short term cash deposits of GBP5,000,000 (2020: nil) are
callable on a notice of 95 days.
18 Borrowings
The Group had a secured bank loan which was drawn down in March
2018. The loan was split into two tranches. The first tranche of
GBP1,995,000 was an amortising term loan over 5 years to March 2022
and the second was a bullet repayment in March 2022. The interest
rate on both tranches was fixed at 11%.
The full balance became repayable in the event of a change in
control. Following flotation on the AIM market of the London Stock
Exchange in October 2020, the loan amount outstanding of
GBP1,936,273 was repaid in full.
In October 2020 the Group agreed a GBP3,000,000 revolving credit
facility, at an interest rate of 2.25% above the Bank of England
base rate, and secured with a floating charge over the Group
assets. The total amount drawn from the borrowing facility as at 31
March 2021 was GBPnil.
This facility is subject to the following financial
covenants:
i) Leverage covenant: Gross borrowings to R&D adjusted
EBITDA: The ratio of Gross Borrowings at the end of each relevant
period to R&D Adjusted EBITDA for such Relevant Period shall
not exceed 1.75 to 1.
R&D adjusted EBITDA is defined as EBITDA less capitalised
development expenditure in the period.
ii) Interest Cover Covenant: EBIT to Net Financing Costs: The
ratio of EBIT for each Relevant Period to Net Financing Costs for
such Relevant Period shall not fall below 4.00 to 1.
The Group has passed all covenant tests during the review
period.
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Amounts due within one
year
Bank loans - 695
Amounts due in more than
one year
Bank loans - 1,581
======== ========
Total borrowings - 2,276
Net debt is arrived at
as follows
Total borrowings - 2,276
Cash and cash equivalents (12,668) (3,664)
--------
Total net cash (12,668) (1,388)
19 Trade and other payables
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Amounts due within one
year
Trade payables 944 999
Other taxes and social
security 126 100
Other payables 51 43
Accruals 1,561 836
Deferred income 1,499 952
Deferred consideration - 97
4,181 3,027
Amounts due after one
year
Deferred income 749 555
Total amounts due 4,930 3,582
Trade and other payables are consistent with trading levels
across the Group but are also affected by exchange rate
fluctuations.
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The Group has
financial risk management policies in place to ensure all payables
are paid within the agreed credit terms.
The directors consider that the carrying amount of trade and
other payables approximates their fair value.
Deferred income relates to fees received for ongoing services to
be recognised over the life of the service rendered.
Deferred consideration has been recognised in the prior year in
relation to an acquisition of intellectual property in 2013.
Initial deferred consideration recognised was equal to the present
value of expected future cash outflows at the date of acquisition,
using a discount rate of 11% in line with the Company's cost of
capital. The outflows would occur periodically in response to sales
of the product that is supported by the intellectual property
acquired. At each year end Management reassessed the expected
future cash outflows using budgeted sales figures, adjusting the
liability if required. The final payment was made in April
2020.
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
At start of the financial
year 97 348
Unwinding of discount (15) 35
Payment of royalties (82) (414)
Fair value loss/(gain) - 128
At end of the financial
year - 97
20 Leases
The Group leases land and buildings for its head office in
Linlithgow, Scotland. The current lease was agreed on 1 December
2019 and will run for the 5-year period to 30 November 2024. The
Group has recognised a right-of use asset and a lease liability
applying a discount rate of 11% for this lease.
The Group leases IT equipment with contract terms ranging
between 1 to 2 years. The Group has recognised right-of use assets
and lease liabilities for these leases.
The carrying value of right of use assets, and lease obligations
recognised with respect to these leases are shown below:
Building Group
Lease IT equipment Total
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2020 649 71 720
Additions - 20 20
Disposals - - -
At 31 March 2021 649 91 740
-------
Amortisation
At 1 April 2020 43 17 60
Charge for the year 130 28 158
Eliminated on disposal - - -
At 31 March 2021 173 45 218
Net book value
31 March 2020 606 54 660
-------- ------------ -------
31 March 2021 476 46 522
--------
Right-of-use assets
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Balance at 1 April 660 65
Additions to right of
use assets 20 720
Depreciation charge for
the year (158) (125)
Balance at 31 March 522 660
======== ========
Lease liabilities
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Balance at 1 April 676 93
Acquisition of new leases 20 720
Payment of lease liabilities (193) (163)
Interest expense on lease
liabilities 63 26
Balance at 31 March 566 676
======== ========
Disclosed as
Current 130 122
Non-current 436 554
--------
566 676
======== ========
The Group also leases land and buildings in Belfast and one
motor vehicle. These leases are low-value, so have been expensed as
incurred. The Group has elected not to recognise right -- of -- use
assets and lease liabilities for these leases.
Lease commitments for short-term and low value leases
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Motor vehicles 15 30
Land and buildings 30 20
-------- --------
45 50
-------- --------
Amounts recognised in the profit and loss
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Depreciation charge -
building lease 130 108
Depreciation charge -
IT equipment 28 17
Interest on lease liabilities 63 26
Low value lease rental 42 38
Amounts recognised in statement of cashflows
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Total cash outflow for
leases (193) (163)
21 Deferred tax
In the Spring Budget 2020, the Government announced that from 1
April 2020 the corporation tax rate would remain at 19% (rather
than reducing to 17%, as previously enacted). This new law was
substantively enacted on 17 March 2020. Deferred tax assets and
liabilities at 31 March 2021 have been calculated based on the rate
of 19% enacted at the balance sheet date. The 2021 budget proposal
increases the corporation tax rate to 25% from 1 April 2023. As the
proposal to increase the rate to 25% had not been substantively
enacted at the balance sheet date, its effects are not included in
this financial information.
Deferred tax asset
Year ended Year
ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Opening balance 554 507
Recognised in statement
of comprehensive income 9 47
Recognised in equity 50 -
----------
Closing balance 613 554
----------
Deferred tax assets arise
as follows:
Unused tax losses 491 554
Share based remuneration 64 -
Other timing differences 58 -
--------
Total deferred tax asset 613 554
---------- --------
Deferred tax liability
Year ended Year
ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Opening liability 1,188 979
Recognised in statement of comprehensive
income 133 209
Recognised in equity - -
Closing liability 1,321 1,188
========== ========
Deferred tax liabilities
arise as follows:
Deferred tax on acquisition 38 58
Timing differences on
development costs 1,275 1,125
Accelerated capital allowances 11 13
Accrued pension costs (3) (8)
---------- --------
Total deferred tax liability 1,321 1,188
========== ========
22 Provisions
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Current provisions
Overseas tax 291 266
Onerous lease - 23
Total current provisions 291 289
======== ========
Non-current provisions
Dilapidations 15 15
-------- --------
Total provisions 306 304
======== ========
The movement in the total
provision liability
At start of financial
year 304 260
Recognised in profit
and loss 2 44
At end of financial year 306 304
======== ========
Current year provisions are recognised in respect of potential
payments to be made to overseas tax authorities, and potential
payments to be made in respect of dilapidations on leased assets.
No discount is recorded on recognition of the provisions or unwound
due to the short-term nature of the expected outflow and the low
value and estimable nature of the non-current element.
23 Financial liabilities
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Derivative financial
instruments - 65
Warrants - 52
Total financial liabilities - 117
======== ========
On 16 July 2013 the Company issued warrants which entitled the
holder to subscribe for 5% of the Ordinary shares in the Company in
the event of an exit (defined as a change of control, a sale or a
listing). The warrants were valued using the share price at the
date of issue of GBP4 per share. These were exercised upon
flotation on the AIM market of the London Stock Exchange.
24 Financial instruments
The Group's activities expose it to a variety of financial
risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's
overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects
on the financial performance of the Group. The Group uses
derivative financial instruments in the form of forward foreign
exchange contracts to hedge certain risk exposures. Derivatives are
exclusively used for hedging purposes, and not as trading or other
speculative instruments. The Group uses different methods to
measure different types of risk to which it is exposed. These
methods include sensitivity analysis in the case of interest rate,
foreign exchange and other price risks and ageing analysis for
credit risk.
Capital management
The Board's policy is to maintain a strong capital base so as to
cover all liabilities and to maintain the business and to sustain
its development. The Board defines capital as total equity, as
recognised in the statement of financial position, plus net debt.
Net debt is calculated as total borrowings less cash and cash
equivalents. In order to maintain or adjust the capital structure,
the Group may return capital to shareholders, issue new shares or
sell assets to reduce debt.
There were no changes in the Group's approach to capital
management during the year.
Neither the Company nor any of its subsidiaries are subject to
externally imposed capital requirements.
(a) Categories of financial instruments
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Financial assets (current
and non-current) at amortised
cost
Trade and other receivables 1,688 2,508
Cash and cash equivalents 12,668 3,664
======== ========
Financial liabilities
(current and non-current)
at amortised cost
Current borrowings - 2,276
Lease liabilities 566 676
Trade and other payables 2,682 3,582
======== ========
Financial liabilities
(current and non-current)
at FVTPL
Derivative financial
instruments - 65
Warrants - 52
Unless otherwise stated, the carrying amounts of financial
instruments reflect their fair value. Under the fair value
three-level hierarchy, based on the lowest level of input that is
significant to the entire fair value measurement, being:
-- Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities that the Group can access at the
measurement date;
-- Level 2: Inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly or indirectly;
-- Level 3: Unobservable inputs for the asset or liability.
Within the comparatives the derivative financial liability
accounted on the foreign exchange forward contract is level 2 and
was determined by valuing the amount outstanding at the year end by
a quoted market price for a similar contract obtained from the
Group's foreign exchange trader. The directors believe this is a
reasonable basis for determining the fair value at the year
end.
Within the comparatives, the warrants reflect the Company had
granted a financial instrument to a lender allowing them to
subscribe for 5% of the Company's share capital at the nominal
value of GBP0.10 per share. The fair value of the instrument was
determined by the fair value of the Company's shares at the date
the instrument was issued. The warrants were therefore a level 2
instrument under the fair value hierarchy.
Financial risk management objectives
The Group's senior management team manage the financial risks
relating to the operations of each department. These risks include
market risk, credit risk and liquidity risk.
Where appropriate, the Group seeks to minimise the effects of
market risks by using financial instruments to mitigate these risk
exposures as appropriate. The Group does not enter into or trade in
financial instruments for speculative purposes.
(b) Market risks
Foreign currency risk
The Group's activities expose it primarily to the financial
risks of changes in foreign currency exchange rates.
As at 31 March 2021 Sterling Euro US Dollar Total
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 70 215 703 988
Borrowings - - - -
Lease liabilities (566) - - (566)
Trade payables (864) - (80) (944)
Cash and cash equivalents 11,658 112 898 12,668
---------- -------
10,298 327 1,521 12,146
----------
Based on this exposure, had Pound Sterling weakened by 5%
the Group's profit before tax would have been GBP92,400 lower.
The percentage change is based on management's assessment
of reasonable possible fluctuations.
As at 31 March 2020 Sterling Euro US Dollar Total
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 298 231 1,433 1,962
Borrowings (2,276) - - (2,276)
Lease liabilities (676) - - (676)
Trade payables (848) (4) (147) (999)
Cash and cash equivalents 1,946 604 1,114 3,664
(1,556) 831 2,400 1,675
======== ======= ========= =======
Based on this exposure had Pound Sterling weakened by 5% the
Group's profit before tax would have been GBP161,000 lower. The
percentage change is based on management's assessment of reasonable
possible fluctuations.
Interest rate risk
The Group is not exposed to any significant interest rate risk
as borrowings are obtained at fixed rates.
Other market price risk
The Group is not exposed to any other significant market price
risks.
(c) Credit risk management
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers.
The Group's principal financial assets, other than business
assets, are trade and other receivables and cash and cash
equivalents. These represent the Group's maximum exposure to credit
risk in relation to financial assets.
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Trade and other receivables 1,688 2,414
Cash and cash equivalents 12,668 3,664
--------
14,356 6,078
======== ========
Trade and other receivables
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each customer.
The balance presented in the balance sheet is net of allowances
for doubtful receivables and returns, estimated by the Group's
management based on prior experience and their assessment in the
current economic climate. No adjustment has been estimated for the
allowance for credit loss.
The Group's main concentration of credit risk relates to where a
credit risk management approach is employed, including strict
retention of title, customer stock holding visibility and the use
of credit insurance.
The Group applies the IFRS 9 simplified model of recognising
lifetime expected credit losses for all trade receivables as these
items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables
have been assessed on a collective basis as they possess shared
credit risk characteristics. They have been grouped based on the
days past due.
The expected credit loss for trade receivables as at 31 March
2021 and 31 March 2020 was determined as follows:
Days past due 0 1-30 31-60 >60 Total
2021
Balance outstanding (GBP'000) 910 46 32 - 988
Historic loss rate 0% 0% 0% 0%
Estimated credit loss provision 0.25% 1% 1.5% 2%
----- ---- ----- --- -----
Potential credit loss allowance
(GBP'000) 3 - - - 3
===== ==== ===== === =====
Days past due 0 1-30 31-60 >60 Total
2020
Balance outstanding (GBP'000) 1,874 9 - 79 1,962
Historic loss rate 0% 0% 0% 0%
Estimated credit loss provision 0.25% 1% 1.5% 2%
----- ---- ----- --- -----
Potential credit loss allowance
(GBP'000) 4 - - 2 6
===== ==== ===== === =====
Due to the immaterial nature of the assessed credit risk, no
provision has been recognised for 31 March 2021 or 31 March
2020.
Cash
Cash is held with banks in the UK/US with high credit ratings
and no financial loss due to the banks failure to meet their
contractual obligations is expected.
(c) Liquidity risk management
The Group manages liquidity risk through the monitoring of
forecast cash flows and through the use of bank loans when required
thereby maintaining sufficient liquid assets to fund its
contractual obligations and maintain the ongoing development of the
Group.
The table below provides an analysis of the Group's financial
liabilities to be settled on a gross basis by relevant maturity
categories from the balance sheet date to the contractual
settlement date. The table includes both interest and principal
cash flows disclosed as remaining contractual maturities and
therefore these totals may differ from their carrying amount in the
statement of financial position.
1 year Over
or 1 to 2 to 5 Total
less 2 years 5 years years liabilities
31 March 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 944 - - - 944
Other payables 1,738 - - - 1,738
Borrowings - - - - -
Lease liabilities 161 117 288 - 566
Deferred consideration - - - - -
2,843 117 288 3,248
------- ------- ------- ------- -----------
1 year Over
or 1 to 2 to 5 Total
less 2 years 5 years years liabilities
31 March 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 999 - - - 999
Other payables 2,753 103 84 15 2,955
Borrowings 911 1,736 - - 2,647
Lease liabilities 167 167 446 - 780
Deferred consideration 102 - - - 102
------- ------- -----------
4,932 2,006 530 15 7,483
------- -------
25 Retirement benefits
Contributions by Group companies are charged to income statement
as an expense as they fall due. The amount recognised as an expense
in relation to defined contributions plans was GBP212,482 (2020:
GBP149,861).
26 Share based payments
The options brought forward into the financial year vested as a
result of a change in control. Options exercised in the year ended
31 March 2021 totalled 40,250 (2020: nil). As at 31 March 2020, the
Company had 248,135 Ordinary Shares. To prepare for listing on AIM,
the Company's share capital was reorganised in September 2020
through bonus issues of shares and a share split, taking the total
number of Ordinary Shares in issue to 60,024,103 and 14,975,897
Ordinary Shares were issued to option and warrant holders, taking
the total Ordinary Shares in issue prior to admission to
75,000,000. The number of share options in issue at the start of
the financial year 40,250 (2020: nil) which were subsequently
exercised is shown as the number prior to the bonus issues of
shares and the share split.
2021 2020
Weighted Weighted
average average
No of exercise No of exercise
share price share price
options (GBP) options (GBP)
At start of
financial year 40,250 2.75 37,150 GBP2.75
Exercised (40,250) (2.75) - -
Granted 2,650,000 GBP0.48 3,100 GBP2.75
Forfeited - - - -
Lapsed - - - -
---------- ---------- --------- ----------
At end of the
financial year 2,650,000 GBP0.48 40,250 GBP2.75
On 5 October 2020 2,650,000 share options were issued to key
management personnel for nil consideration. The valuation model
inputs used to determine the fair value at the grant date are as
follows:
Share Risk Fair
price free value
Grant Vesting Options at grant Exercise Expected Dividend interest at grant
date date granted date price volatility yield rate date
05/10/2020 04/10/2023 853,333 GBP0.51 GBP0.48 61.0% 1.0% 0.02% GBP180,056
05/10/2020 04/10/2024 853,333 GBP0.51 GBP0.48 61.0% 1.0% 0.02% GBP200,726
05/10/2020 04/10/2025 853,334 GBP0.51 GBP0.48 61.0% 1.0% 0.02% GBP214,447
Of the shares options granted in the current year 500,000 are
options held by directors. All options held by directors have a
weighted average exercise price of GBP0.48. Within the cost of the
options recognised in the income statement GBP93,604 is
attributable to directors (2020:GBP21,531)
27 Group companies
Subsidiary undertakings Country of registration Principal activity Percentage of
of incorporation shares held
2021 2020 2019
Sales and marketing
Support services
Calnex Americas to Calnex Solutions
Corporation USA plc 100% 100% 100%
Calnex Solutions Northern Ireland IT network testing
(Belfast) Ltd specialising * 100% 100%
in wide area
network emulation
and load testing
Calnex Solutions UK Holding company * 100% -
(Berlin) Ltd
Calnex Solutions Germany Solutions partner * 100% -
(Berlin) GmBH to the component
& module test
market
28 Called up share capital
As at 31 March 2020, the Company had 248,135 shares in
issue.
To prepare for admission to AIM, the Company's share capital was
reorganised in September 2020 through bonus issues of shares and a
share split taking the total number of shares to 60,024,103.
Immediately prior to admission, 14,975,897 Ordinary Shares were
issued to option and warrant holders, taking the total Ordinary
Shares in issue prior to admission to 75,000,000.
12,500,000 new Ordinary Shares were issued and placed on
admission, taking the total share capital in issue immediately
following
the placing to 87,500,000 Ordinary Shares of 0.125p each.
Group and Company
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Ordinary shares of 0.125p (2020:
GBP0.10) each 109 25
========== ==========
On issue at the start of the financial
year 25 25
Bonus issue of shares 50
Share options exercised 18 -
Shares issued 16 -
In issue at end of the financial
year 109 25
29 Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of Ordinary Shares in issue during the year.
Diluted earnings per share is calculated by dividing the
earnings attributable to ordinary shareholders by the total of the
weighted average number of Ordinary Shares in issue during the year
and adjusting for the dilutive potential Ordinary Shares relating
to share options and warrants.
Year Year
ended ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Profit after tax attributable to
shareholders 3,453 2,287
Weighted average number of ordinary
shares used in calculated:
Basic earnings per share 73,762 60,024
Diluted earnings per share 82,575 75,000
Earnings per share - basic (pence) 4.68 3.81
Earnings per share - diluted (pence) 4.18 3.05
30 Notes to the Statement of Cashflow
Reconciliation of changes in liabilities to cashflows arising
from financing activities
Lease Lease
liabilities liabilities
Borrowings Premises IT Equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March 2020 2,276 616 60 2,952
Borrowing repayment (2,276) - - (2,276)
Lease repayment (167) (26) (193)
----------- ------------- ------------- --------
Total changed from financing
cashflows (2,276) (167) (26) (2,469)
Acquisition of new lease - - 20 20
Unwinding of discount rate - 59 4 63
----------- ------------- ------------- --------
Total other changes - 59 24 83
Balance at 31 March 2021 - 508 58 566
----------- ------------- ------------- --------
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END
FR PPUAGAUPGPGC
(END) Dow Jones Newswires
May 25, 2021 02:00 ET (06:00 GMT)
Calnex Solutions (LSE:CLX)
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