TIDMDSG

RNS Number : 6795M

Dillistone Group PLC

23 September 2021

Dillistone Group Plc

("Dillistone", the "Company" or the "Group")

Interim Results

Dillistone Group Plc, the AIM quoted supplier of software and services to the international recruitment industry, announces its unaudited results for the six months ended 30 June 2021.

Key points of the results:

-- Revenue declined by 17% to GBP2.801m due primarily to the unwinding of the impact of the Pandemic.

   --    Recurring revenues represented 90% (2020: 90%) of Group revenue. 

-- Recurring revenue covered 99% (2020 H1: 101%: 2020 H2: 93%) of administrative expenses before acquisition related and other costs.

-- Improving order book in Q2 2021. First quarter down on pre-covid period, but Q2 showed 67% year on year growth.

   --    Loss for the period of GBP0.101m (2020: loss GBP0.088m). 

-- Net Cash at period end was GBP1.039m, with an increase in net cash generated by operating activities of 39%.

   --    Continued investment in product development. 
   --    Successful launch of Talentis executive search software (https://www.talentis.global/recruitment-software/insights/) in January 2021. 
   --    Talentis TalentGraph doubled in size since launch. 

Commenting on the results and prospects, Giles Fearnley, Non-Executive Chairman, said:

"In my statement a year ago, I reported a strong start to 2020 prior to the impact of Covid. In our business, where a large part of our revenue is contracted annually in advance, the impact of a sudden shock can take time to impact through to revenue and profits. As a result of this, our first half results show the expected fall in revenue and profitability compared to last year.

" Our business model is such that the impact of Covid 19 will continue to unwind through the remainder of 2021 and this will be evident in our full year results and the level of recurring revenue that we carry into 2022. Nevertheless, the business is seeing improved new business sales, improved orders from existing clients, and improved operating cash flow.

"We therefore expect to deliver a significantly reduced loss before tax in 2021, compared with the prior year. Our cash position as at 31 August 2021 was GBP1.092m."

Enquiries:

 
 Dillistone Group Plc                                          Via Walbrook PR 
 Jason Starr               Chief Executive 
 Julie Pomeroy             Group Finance Director 
 
 WH Ireland Limited (Nominated adviser) 
                           Managing Director, 
 Chris Fielding             Corporate Finance                    020 7220 1650 
 
 Walbrook PR 
 Tom Cooper / Nick Rome                                          020 7933 8780 
                                                     dillistone@walbrookpr.com 
 

Notes to Editors:

Dillistone Group Plc is a leader in the supply and support of software and services to recruiters. Dillistone operates through the Ikiru People brand.

The Group develops, markets and supports the Talentis, FileFinder, Infinity, Midoffice, ISV and GatedTalent products.

Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006. The Group employs around 90 people globally with offices in Basingstoke, Southampton, New Jersey and Sydney.

Talentis Recruitment Software: https://www.Talentis.global

Voyager Recruiter Software: https://www.VoyagerSoftware.com

Chairman's Statement

In my statement a year ago, I reported a strong start to 2020 prior to the impact of Covid. In our business, where a large part of our revenue is contracted annually in advance, the impact of a sudden shock can take time to impact through to revenue and profits. As a result of this, our first half results show the expected fall in revenue and profitability compared to last year.

What is clear, however, is that the Group and the markets it serves, are showing improved performance. While orders in Q1 of 2021 were down on a very strong opening period in 2020, total incoming orders were 67% higher in Q2 - reflecting both growth in new business sales and existing clients starting to add licences as confidence returns to the economy.

Our investment in product development was maintained throughout the pandemic, and we are confident that this decision was the right one. In January we announced the launch of Talentis ( https://www.talentis.global/recruitment-software/insights/ ) and continue to invest across our portfolio of recruitment solutions.

As previously announced our Group Finance Director, Julie Pomeroy, retires from executive leadership on 30 September 2021 but will remain with us as a non executive Director for 12 months to ensure a smooth handover to Joanne Curd who joins the Board on 1 October 2021. We are also saying goodbye to Alex James as an Executive Director on 30 September, and he will leave the business on or before 31 January 2022. I would like to thank both Alex and Julie for their work on behalf of the Group.

Operational Review

Over the course of H1 2021, the Group has made significant progress on a number of fronts.

Our Talentis product, announced in January, has been very well received among its target audience. While it's impact on revenue in 2021 will be very small, our expectation is that it will make a growing and significant contribution to the business in future years.

Talentis is a cross between a CRM and a candidate sourcing tool and operates in a manner that the Board believes is unique within its sector. At its core is the Talentis TalentGraph, which contains detailed profiles of millions of individuals - including profiles associated with senior executives who may not be found on everyday social media platforms. The scale of the TalentGraph itself has more than doubled since launch, with approximately 50 million profiles currently included in the Index. The TalentGraph has the ability to recognise and interpret executive information across more than 1 billion distinct webpages.

Talentis was launched in January and was initially available on a free basis. First revenues were generated in late April and the platform is now used as a sourcing tool alongside the Group's existing products, as well as on a standalone basis by firms that were not previously clients of the Group. User and client numbers are growing each month, and internal metrics suggest that our users are finding increasing value in the platform and this should continue as new functionality is being added on an ongoing basis.

The Group continues also to develop its established products. A major project is underway to convert our FileFinder product to a more modern cloud platform. While this has increased our Cloud costs in 2021, this is primarily down to the running of duplicated platforms. The cost should fall in 2022.

Our Infinity CRM has continued to perform well and is increasingly competitive in the temporary staff sector, a fast growing niche where we also provide our Mid Office product. We are in the process of porting clients from our legacy VDQ platform to Infinity, and this process should be completed by June 2022.

Our GatedTalent division has extended its B2C product offerings in the first half and continues to provide career support to executives across the globe. Via our inhouse team and our external partners, we now provide services ranging from interview coaching to profile optimisation.

Candidate testing is an important part of the hiring process, and our skills testing product, ISV.Online, continues to be used by the majority of the UK's largest recruiting firms.

Financial Performance

Revenue in the six months ended 30 June 2021 amounted to GBP2.801m, down GBP0.558m (17%) (2020: GBP3.359m) and reflecting the ending of client contracts entered into pre-covid. Recurring revenues decreased by 17% to GBP2.522m over the comparable period last year (2020: GBP3.029m) and represented 90% of total revenues (2020: 90%). Non-recurring revenues were down at GBP0.200m (2020: GBP0.290m).

Cost of sales were broadly in line with 2020 at GBP0.336m (2020: GBP0.328m). Cost of sales were impacted by duplicating hosting costs for our FileFinder SaaS product as we moved to a new platform, a process which is expected to be largely completed in 2021 and will, allow us to deliver a better user experience at a lower cost. Excluding amortisation and depreciation and one-off type costs, administration expenses reduced by GBP0.299m to GBP2.006m (2020: GBP2.305m) reflecting the impact of Covid-19 and cost reductions. The Group also continued to take advantage of the flexible furlough scheme during the period. The above administration expenses were covered 126% by recurring revenue (2020: 131%). Excluding acquisition related items, depreciation and amortisation administrative costs decreased by 19% to GBP0.549m (2020: GBP0.678m).

Administrative costs also included GBP0.107m (2020: GBP0.106m) relating to the amortisation of acquisition intangibles), and other items of credit GBP(0.092)m (2020: GBPnil made up of the write-off of a US payroll protection loan which was forgiven in the period and a Covid-19 related grant.

The loss for the period increased to GBP0.141m (2020: loss GBP0.110m) before taxation and GBP(0.101m) (2020: GBP(0.088m)) after taxation.

There is a tax credit for the period of GBP0.040m (2020: credit GBP0.022m). The 2020 and 2021 tax credits have benefited from claims in the UK for research and development reflecting the continuing development of our products. Also, the tax credit was impacted through the increase in the rate for deferred tax to 25% (2020:19%).

Cash generated from operating activities increased to GBP0.562m (2020: GBP0.403m). Total cash flows in the 6 months ended 30 June 2021 showed a net outflow of GBP0.110m (2020: inflow GBP1.043m). The main elements of non-operating expenditure related to investment in new product development of GBP0.504m (2020: GBP0.499m) and loan repayments of GBP0.213m. In 2020 we received a CBIL loan of GBP1.5m. The 2019 bank loan was also fully repaid in the period. At 30 June 2021, we had gross cash reserves of GBP1.175m (2020: GBP1.732m) and GBP1.964m in borrowings (2020: GBP2.309m).

Strategy

Our strategy is unchanged. We are excited by the opportunity provided by our new Talentis product and continue to invest across our product range and services, consistently delivering sector leading reviews on services like TrustPilot.

Outlook

As explained above, our business model is such that the impact of Covid 19 will continue to unwind through the remainder of 2021 and this will be evident in our full year results and the level of recurring revenue that we carry into 2022. Nevertheless, the business is seeing improved new business sales, improved orders from existing clients, and improved operating cash flow.

We therefore expect to deliver a significantly reduced loss before tax in 2021, compared with the prior year. Our cash position as at 31 August 2021 was GBP1.092m.

Giles Fearnley

Non-Executive Chairman

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
                                        Note     6 Months ended 30     Year ended 
                                                        June               31 Dec 
                                                    2021        2020         2020 
                                               Unaudited   Unaudited      Audited 
                                                 GBP'000     GBP'000      GBP'000 
 
 Revenue                                 4         2,801       3,359        6,332 
 Cost of sales                                     (336)       (328)        (584) 
                                              ----------  ----------  ----------- 
 Gross profit                                      2,465       3,031        5,748 
 Administrative expenses                         (2,570)     (3,089)      (6,569) 
                                              ----------  ----------  ----------- 
 
 Result from operating activities        4         (105)        (58)        (821) 
 
 Analysed as: 
 Result from operating activities 
  before acquisition related, 
  reorganisation and other 
  items                                             (90)          48        (166) 
 Acquisition related, reorganisation 
  and other items                        5          (15)       (106)        (655) 
                                              ----------  ----------  ----------- 
 Result after acquisition related 
  items                                            (105)        (58)        (821) 
--------------------------------------------  ----------  ----------  ----------- 
 
 Financial cost                                     (36)        (52)         (93) 
                                              ----------  ----------  ----------- 
 (Loss) before tax                                 (141)       (110)        (914) 
 
 Tax income                              6            40          22          251 
                                              ----------  ----------  ----------- 
 (Loss) for the period                             (101)        (88)        (663) 
 
 Other comprehensive income 
  net of tax: 
 Currency translation differences                      2        (15)           12 
                                              ----------  ----------  ----------- 
 Total comprehensive (loss) 
  for period net of tax                             (99)       (103)        (651) 
                                              ----------  ----------  ----------- 
 
 Earnings per share (pence) 
 Basic                                   8        (0.51)      (0.45)       (3.37) 
 Diluted                                          (0.51)      (0.45)       (3.37) 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
 
                                  As at 30 June   As at 30 June 2020   As at 31 Dec 2020 
                                           2021 
                                      Unaudited            Unaudited             Audited 
 ASSETS                                 GBP'000              GBP'000             GBP'000 
 Non-current assets 
 Goodwill                                 3,415                3,415               3,415 
 Intangible assets                        3,274                4,022               3,362 
 Right of use assets                        646                  735                 680 
 Property plant & equipment                  18                   38                  24 
                                 --------------  -------------------  ------------------ 
                                          7,353                8,210               7,481 
 Current assets 
 Trade and other receivables                843                1,159                 883 
 Current tax receivable                      67                    -                 186 
 Cash and cash equivalents                1,175                1,732               1,291 
                                 --------------  -------------------  ------------------ 
                                          2,085                2,891               2,360 
                                 --------------  -------------------  ------------------ 
 Total assets                             9,438               11,101               9,841 
                                 --------------  -------------------  ------------------ 
 
 EQUITY AND LIABILITIES 
 Equity 
 Share capital                              983                  983                 983 
 Share premium                            1,631                1,631               1,631 
 Merger reserve                             365                  365                 365 
 Convertible loan reserve                    14                   14                  14 
 Retained earnings                          107                  783                 208 
 Share option reserve                       124                  106                 110 
 Translation reserve                         61                   32                  59 
                                 --------------  -------------------  ------------------ 
 Total equity                             3,285                3,914               3,370 
 
 Liabilities 
 Non current liabilities 
 Trade and other payables                   237                  341                 271 
 Lease liabilities                          604                  690                 638 
 Borrowings                               1,600                1,995               1,749 
 Deferred tax                               299                  323                 296 
                                 --------------  -------------------  ------------------ 
 Total non-current liabilities            2,740                3,349               2,954 
                                 --------------  -------------------  ------------------ 
 Current liabilities 
 Trade and other payables                 2,808                3,410               2,953 
 Lease liabilities                          105                  100                 103 
 Borrowings                                 364                  314                 461 
 Utilisation of banking                     136                    -                   - 
  facility 
 Current tax payable                          -                   14                   - 
                                 --------------  -------------------  ------------------ 
 Total non-current liabilities            3,413                3,838               3,517 
                                 --------------  -------------------  ------------------ 
 Total liabilities                        6,153                7,187               6,471 
                                 --------------  -------------------  ------------------ 
 Total liabilities and 
  equity                                  9,438               11,101               9,841 
                                 --------------  -------------------  ------------------ 
 

The interim report was approved by the Board of directors and authorised for issue on 22 September 2021. They were signed on its behalf by:

   JS Starr                                                J P Pomeroy 

CONSOLIDATED STATEMENT OF CASH FLOWS

 
 
                                                      As at 30 June         As at 31 
                                                                            December 
                                                       2021         2020        2020 
                                                  Unaudited    Unaudited     Audited 
 
                                                    GBP'000      GBP'000     GBP'000 
 Operating Activities 
 (Loss) before tax                                    (141)        (110)       (914) 
 Adjustment for 
  Financial cost                                         36           51          93 
  Depreciation and amortisation                         656          784       1,984 
  Share option expense                                   15           12          16 
  Other including foreign exchange adjustments 
   arising from operations                              (4)           16        (28) 
 Operating cash flows before movements 
  in working capital                                    562          753       1,151 
 
 Increase in receivables                                 20           65         360 
 Decrease in payables                                 (184)        (730)     (1,120) 
 Net taxation repaid                                    164          315         314 
 
 Net cash generated from operating activities           562          403         705 
                                                 ----------  -----------  ---------- 
 
 Investing Activities 
 Purchases of property plant and equipment              (4)          (2)         (2) 
 Investment in development costs                      (504)        (499)       (969) 
 Net cash used in investing activities                (508)        (501)       (971) 
                                                 ----------  -----------  ---------- 
 
 Financing Activities 
 Finance cost                                          (36)         (49)        (84) 
 Lease payments made                                   (51)         (68)       (114) 
 Loan proceeds                                            -        1,586       1,500 
 Bank loan repayments                                 (213)         (40)       (166) 
 Utilisation of banking facility                        136        (288)       (288) 
                                                 ----------  -----------  ---------- 
 Net cash generated from financing activities         (164)        1,141         848 
                                                 ----------  -----------  ---------- 
 
 Net change in cash and cash equivalents              (110)        1,043         582 
 Cash and cash equivalents at beginning 
  of the period                                       1,291          690         690 
 Effect of foreign exchange rate changes                (6)          (1)          19 
 
 Cash and cash equivalents at end of 
  period                                              1,175        1,732       1,291 
                                                 ----------  -----------  ---------- 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                               Share      Share     Merger   Retained    Convertible      Share    Foreign     Total 
                             capital    premium    Reserve   earnings   loan reserve     option   exchange 
                             GBP'000    GBP'000    GBP'000    GBP'000        GBP'000    GBP'000    GBP'000   GBP'000 
 
 Balance at 31 December 
  2020                           983      1,631        365        208             14        110         59     3,370 
 Comprehensive income 
 Loss for the 6 
  months ended 30 
  June 2021                        -          -          -      (101)              -          -          -     (101) 
 Other comprehensive                                                                                               - 
  income 
 Exchange differences 
  on translation 
  of overseas operations           -          -          -          -              -          -          2         2 
 Total comprehensive 
  (loss)                           -          -          -      (101)              -          -          2      (99) 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 Transactions with 
  owners 
 Share option charge               -          -          -          -              -         14          -        14 
 
 Balance at 30 June 
  2021                           983      1,631        365        107             14        124         61     3,285 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 
 Balance at 31 December 
  2019                           983      1,631        365        871             14         94         47     4,005 
 Comprehensive income 
 Loss for the 6 
  months ended 30 
  June 2020                        -          -          -       (88)              -          -          -      (88) 
 Other comprehensive                                                                                               - 
  income 
 Exchange differences 
  on translation 
  of overseas operations           -          -          -          -              -          -       (15)      (15) 
 Total comprehensive 
  (loss)                           -          -          -       (88)              -          -       (15)     (103) 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 Transactions with 
  owners 
 Share option charge               -          -          -          -              -         12          -        12 
 
 Balance at 30 June 
  2020                           983      1,631        365        783             14        106         32     3,914 
                           ---------  ---------  ---------  ---------  -------------  ---------  ---------  -------- 
 

NOTES TO THE INTERIM

 
  NOTES TO THE UNAUDITED INTERIM REPORT 
 

CONSOLIDATED STATEMENT OF

   1.         Basis of Preparation 

The financial information for the six months ended 30 June 2021 included in this condensed interim report comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes.

The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with UK adopted international accounting standards but does not include all of the disclosures that would be required under International Financial Reporting Standards (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2020 and are those which will form the basis of the 2021 financial statements.

The comparative financial information presented herein for the year ended 31 December 2020 does not constitute full statutory accounts for that period. The Group's annual report and accounts for the year ended 31 December 2020 have been delivered to the Registrar of Companies. The Group's independent auditor's report on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Going concern and the impact of COVID-19

The Group has seen many of its clients shrink with some clients closing and this has been reflected in the Group's 2021 budgets and subsequent years' forecasts. The forecasts also assume that clients will start to grow as 2021 progresses.

The Group derives much of its revenue from the recruitment sector and this is a sector that has suffered during the period of the Pandemic. However, there are strong signs that the market is recovering and this, in the fullness of time, should benefit the Group.

In this context, the directors have continued to perform detailed forecasting on a regular basis taking into account current trading and expectations and cash balances and, having reflected upon these forecasts, the directors of the Company continue to adopt the going concern basis of accounting in preparing the financial statements.

Dillistone Group Plc is the Group's ultimate parent company. It is a public listed company and is domiciled in the United Kingdom. The address of its registered office and principal place of business is 12 Cedarwood, Crockford Lane, Chineham Business Park, Basingstoke, RG24 8WD. Dillistone Group Plc's shares are listed on the Alternative Investment Market (AIM).

   2.         Share Based Payments 

The Company operates two share option schemes. The fair value of the options granted under these schemes is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period at the end of which the option holder may exercise the option. The fair value of the options granted is measured using the Black-Scholes model.

3. Reconciliation of adjusted operating profits to consolidated statement of comprehensive income

30 June 2021 and 30 June 2020

 
                               Adjusted   Acquisition                    Adjusted           Acquisition 
                              operating       related                   operating    and reorganisation 
                                profits         items                     profits               related 
                                                                                                  items 
                                                                                                            30-Jun 
                            30-Jun-2021         2021*   30-Jun-2021   30-Jun-2020                 2020*       2020 
 
                                GBP'000       GBP'000       GBP'000       GBP'000               GBP'000    GBP'000 
 
 Revenue                          2,801             -         2,801         3,359                     -      3,359 
 
 Cost of sales                    (336)             -         (336)         (328)                     -      (328) 
 
 Gross profit                     2,465             -         2,465         3,031                     -      3,031 
 
 Administrative expenses        (2,555)          (15)      (2, 570)       (2,983)                 (106)    (3,089) 
 
 Results from operating 
  activities                       (90)          (15)         (105)            48                 (106)       (58) 
 
 
 Financial cost                    (36)             -          (36)          (52)                     -       (52) 
 
 (Loss) before tax                (126)          (15)         (141)           (4)                 (106)      (110) 
 
 Tax expense/(income)                36             4            40            23                   (1)         22 
 
 (Loss)/profit for 
  the year                         (90)          (11)         (101)            19                 (107)       (88) 
 
 Other comprehensive 
  income net of tax: 
 Currency translation 
  differences                         2             -             2          (15)                     -       (15) 
 
 Total comprehensive 
  (loss)/income/ for 
  the year net of tax              (88)          (11)          (99)             4                 (107)      (103) 
                           ------------  ------------  ------------  ------------  --------------------  --------- 
 

* see accounts note 5

Earnings per share - from continuing activities

 
 Basic        (0.46)p             (0.51)p           0.10p     (0.45)p 
 Diluted      (0.46)p           (0.51)p             0.10p   (0.45)p 
 
 

31 December 2020

 
                                          Adjusted           Acquisition 
                                         operating    and reorganisation 
                                           profits               related 
                                                                   items 
                                       31 December                 2020*     31 December 
                                              2020                                  2020 
 
                                           GBP'000               GBP'000         GBP'000 
 
 Revenue                                     6,332                     -         6,332 
 
 Cost of sales                               (584)                     -         (584) 
                                      ------------  --------------------  ------------ 
 
 Gross profit                                5,748                     -         5,748 
 
 Administrative expenses                   (5,914)                 (655)       (6,569) 
 
 Results from operating activities           (166)                 (655)         (821) 
 
 
 Financial cost                               (93)                     -            (93) 
 
 Loss before tax                             (259)                 (655)           (914) 
 
 Tax income                                    143                   108             251 
 
 Loss for the year                           (116)                 (547)           (663) 
 
 Other comprehensive income 
  net of tax: 
 Currency translation differences               12                     -              12 
 
 Total comprehensive loss for 
  the year net of tax                        (104)                 (547)           (651) 
                                      ============  ====================  ============== 
 

* see accounts note 5

Earnings per share - from continuing activities

 
 Basic      (0.59)p   (3.37)p 
 Diluted    (0.59)p   (3.37)p 
 
   4.         Segment reporting 
 
 Results 
                                                             Year ended 
                                       6 months ended 30 June    31 Dec 
                                        2021             2020      2020 
                                     GBP'000          GBP'000   GBP'000 
 
 Results from operating activities 
 Ikiru People                           (61)               70     (123) 
 
 Central                                (29)             (22)      (43) 
 
 Reorganisation and other 
  costs                                   92                -     (442) 
 Amortisation of acquisition 
 intangibles and reorganisation 
 costs                                 (107)            (106)     (213) 
 Result from operating 
  activities                           (105)             (58)     (821) 
 
 
 
 Geographical segments 
 The following table provides an analysis of the Group's revenues 
  by geographical market. 
                                                                                            Year ended 
                                                         6 months ended 30 June                 31 Dec 
                                                                           2021     2020*         2020 
                                                                        GBP'000   GBP'000      GBP'000 
 UK                                                                       1,928     2,091        3,717 
 Europe                                                                     441       607          877 
 Americas                                                                   242       436        1,074 
 Australia                                                                   76        67          295 
 ROW                                                                        114       158          369 
                                                                          2,801     3,359        6,332 
                                                        =======================  ========  =========== 
 
 
 

* restated to included ROW

 
 
 
   Business Segment 
 The following table provides an analysis of the Group's revenues 
  by products and services. 
                                                                                                    Year ended 
                                                                           6 months ended 30 June       31 Dec 
                                                                                   2021      2020         2020 
                                                                                GBP'000   GBP'000      GBP'000 
 Recurring                                                                        2,522     3,029        5,745 
 Non recurring                                                                      200       290          485 
 Third party revenues                                                                79        40          102 
                                                                                  2,801     3,359        6,332 
                                                                =======================  ========  =========== 
 
 
   'Recurring income' represents all income recognised over time, 
   whereas 'Non-recurring income' represents all income recognised 
   at a point in time. Recurring income includes all support services, 
   software as a service income (SaaS) and hosting income. Non-recurring 
   income includes sales of new licenses, and income derived from 
   installing those licenses including training, installation, and 
   data translation. Third party revenues arise from the sale of 
   third party software. 
 
 
   5.         Acquisition related items and other one off costs 
 
                                                             Year ended 
                                    6 months ended 30 June       31 Dec 
                                         2021         2020         2020 
                                      GBP'000      GBP'000      GBP'000 
 Reorganisation costs                       -            -           78 
 Grants received from overseas 
  jurisdictions                           (6)            -         (71) 
 Overseas loan waived                    (86)            -            - 
 Amortisation of acquisition 
  intangibles                             107          106          213 
 Write-off of capitalised 
  development                               -            -          435 
 
 
 Total                                     15          106          655 
                                 ============  ===========  =========== 
 
   6.         Tax 
 
                                                                Year ended 
                                       6 months ended 30 June       31 Dec 
                                            2021         2020         2020 
                                         GBP'000      GBP'000      GBP'000 
 
 Current tax                                (43)          (5)         (99) 
 Prior year adjustment - current 
  tax                                          -            -        (108) 
 Deferred tax release                       (11)         (18)        (123) 
 Prior year adjustment - deferred 
  tax                                          -            -           80 
 Deferred tax rate change 
  to 25% (19% in 2020)                        34            -           40 
 Deferred tax re acquisition 
  intangibles                               (20)            1         (41) 
 Tax credit for the period                  (40)         (22)        (251) 
                                    ============  ===========  =========== 
 

The tax charge is calculated for each jurisdiction based on the estimated position for the year. Deferred tax

has been provided at rates of between 19% and 25%   (2020: 19%). 
   7.         Dividends 

The Board has decided not to pay an interim dividend (2020: nil per share).

   8.         Earnings per Share 
 
                                                                   Year ended 
                                        6 months ended 30 June         31 Dec 
                                            2021          2020           2020 
 
 Basic earnings per share 
 (Loss) attributable to ordinary 
  shareholders                      GBP(101,000)   GBP(88,000)   GBP(663,000) 
 
 Weighted average number of 
  shares                              19,668,021    19,668,021     19,668,021 
 
 Basic (loss) per share (pence)           (0.51)        (0.45)         (3.37) 
                                   =============  ============  ============= 
 
 

As the Group is in a loss position shares options are anti-dilutive.

   9.         Related party transactions 

The Company has related party relationships with its subsidiaries, its directors, and other employees of the Company with management responsibility. There were no transactions with these parties during the period outside the usual course of business.

The Directors participated in the issue of convertible loan notes in 2017 which carry interest at 8.15% per annum payable quarterly in arrears.

There were no transactions with any other related parties.

   10.       Cautionary statement 

This Interim Report has been prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for these strategies to succeed. The Interim Report should not be relied on by any other party or for any other purpose. The Interim Report contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of the Company. These statements are made in good faith based on the information available to them up to the time of their approval of this report. However, such statements should be treated with caution as they involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. The continuing uncertainty in global economic outlook inevitably increases the economic and business risks to which the Company is exposed. Nothing in this announcement should be construed as a profit forecast.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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END

IR DLLFLFKLZBBZ

(END) Dow Jones Newswires

September 23, 2021 02:00 ET (06:00 GMT)

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