TIDMIDE
RNS Number : 4522N
IDE Group Holdings PLC
30 September 2021
IDE Group Holdings Plc
("IDE", the "Group" or the "Company")
Unaudited Interim Results
IDE Group Holdings plc, the mid-market network, cloud and IT
managed services provider, today announces its unaudited results
for the six months ended 30 June 2021.
Summary
-- On 28 September 2021 the Board announced that it was in
advanced discussions to sell its wholly owned subsidiary, IDE Group
Connect Limited. As the sale is highly probable the Directors have
added a proforma to their unaudited interim results for 2021 which
sets out the impact for the six months trading results for the
months ended 30 June 2021 illustrating these entities as
discontinued operations. The proforma is attached to the end of
these results.
Financial highlights for the expected continuing operations
-- Revenue* of GBP7.6 million (H1 2020: GBP6.8 million)
-- Gross profit* of GBP3.6 million (H1 2020: GBP2.5 million)
representing an improved margin of 47% (H1 2020 37%)
-- Adjusted EBITDA** profit of GBP2.1 million (H1 2020: 0.5 million)
* from continuing operations, excluding the results relating to
IDE Group Connect Limited and Nimoveri Limited
IDE Group Holdings Plc Tel: +44 (0)344
Andy Parker, Non-Executive Chairman 874 1000
finnCap Limited Tel: +44 (0)20 7220
Nominated Adviser and Broker 0500
Corporate finance: Jonny Franklin-Adams/
Abby Kelly
ECM: Tim Redfern/ Richard Chambers
Non-Executive Chairman's Statement
The first six months of the year has been a period of growth as
we come out of the COVID-19 restrictions. The Group has taken
advantage of this period to continue to restructure the operational
side of the business and have decided to concentrate on the
profitable Manage side of the operations.
Manage
Our Manage division has been highly praised as a service and
support partner by its customer base. When considering which of our
two divisions to focus on it was clear that further investment in
this division would be beneficial. Consequently, the Company
announced a major contract win with an existing partner in January
2021 that would deliver revenues of GBP22.5m in the subsequent 3
years with a possible extension to 5 years.
I'm delighted to say that this relationship has deepened and
extended quickly, indeed the unfiltered pipeline for this division
now runs into north of GBP60m albeit this has two major contracts
within it.
As can be seen from the half year results this division is
showing good organic growth at a revenue and profit level, and it
is our belief that this will continue over the next few years.
All our colleagues in Manage deserve a hearty thank you for the
outstanding work delivered and service excellence enjoyed by our
partners.
Connect
The Connect division has continued to struggle in H1. A lack of
scale has continued to hold the business back and the choice for
IDE was to invest by way of acquisition to enable scale or sell the
business to someone else.
An informal process was undertaken with Oakley Capital and the
combination of continuing churn and longer-term onerous contracts
made an elongated sale process an unrealistic option. The reported
expected sale price reflects this.
Sale of subsidiary undertakings IDE Group Connect Limited and
Nimoveri Limited
As we announced on 28(th) September 2021, the Board announced
that it was in advanced discussions to sell its wholly owned
subsidiary IDE Group Connect Limited. The proforma statement at the
end of these unaudited financial results shows that for the period
1 January 2021 to 30 June 2021 IDE Group Connect Limited and
Nimoveri Limited made a combined operating loss of GBP1.4
million.
Summary and Outlook
On the 28(th) September 2018 this Company reported a damning
review of the Company by its Executive Director and representative
of the largest shareholder, MXC. MXC, along with other shareholders
committed to resolving what was a terrible situation for all
shareholders and backed that with new money inviting all
shareholders to participate.
It has taken three long years to turn this company around, but I
am truly delighted to say that at last, with the expected sale of
Connect, we have a meaningfully profitable company with excellent
prospects.
The efforts of all staff involved in this turnaround cannot be
underestimated. Some incredibly tough decisions have been made
along the way which has seen good people leave the business because
the company neither had the scale or resources to keep them.
This thankfully is now in the past and with the Company entirely
focused on its partner revenues through Manage we have an exciting
future ahead of us. At both a trading, post central and PLC costs
we have a profitable business. Our focus is now entirely on growth,
continued organic growth and the possibility of acquisitions. Our
experience of right sizing this company and moving old style
working practices into new, more efficient ways of delivering
service mean that we can operate profitably and decrease the cost
to serve for our partners. It's a hackneyed phrase but a true Win -
Win.
The Company is now seriously looking at options to remove the
debt overhang and is liaising with the debtholders to ascertain the
best way to resolve this and finally allow the company to prosper
for all shareholders.
This day has been a long time coming but for the first time in
three years we can confidently look forward to a positive and
rewarding future for IDE shareholders.
Andy Parker
Non-Executive Chairman
Financial Review
Results for the six months to 30 June 2021
Revenue for the six months to 30 June 2021 from operations was
GBP 13.9 million (H1 2020: GBP12.4 million).
Gross profit for the six months to 30 June 2021 was GBP4.1
million (H1 2020: GBP3.1 million), representing an overall gross
margin of 29.0%, a significant improvement to the prior period. The
change in gross profit in the six months to 30 June 2021 was due to
improved trading in IDE Manage.
At an Adjusted EBITDA* level the Group generated a profit of
GBP1.5 million (H1 2020: GBP0.4 million ).
Exceptional costs amounted to GBP0.2 million (H1 2020: GBP0.3
million) and related predominantly to legacy redundancy costs as a
result of the reduction in headcount in the previous financial
year. Going forward, we expect exceptional costs to continue to
decrease.
Net financial costs remained at GBP0.8 million (H1 2020: GBP1.0
million), which include GBP0.7 million of interest on the loan
notes issued which is payable at the end of their term. In
addition, the costs include GBP0.1 million of notional interest in
relation to the convertible loan notes.
The loss after tax for the period was GBP1.3 million (H1 2020:
loss of GBP3.6 million).
Loss per share was (0.31)p (H1 2020: loss per share 0.89p).
Cashflow and Net Debt
The Group's cash generated from operating activities in the
period was GBP 0.1 million (H1 2020 inflow of GBP0.9 million),
reflecting positive underlying performance and careful management
of working capital. The Group invested GBP0.04 million in fixed
assets. There were no new borrowi ngs, but repayment of lease
liabilities consumed GBP0.1 million (H1 2020: GBP0.9 million). The
net result is that as at 30 June 2021 there were no bank borrowings
or overdraft debt and the cash balance was GBP 0.6 million (H1
2020: GBP0.5 million). Net debt as at 30 June 2021 was GBP20.1
million (31 December 2020: GBP24.8 million).
Appointment of a New CFO
In August, the Company announced the resignation of its Chief
Financial Officer, David Templeman. An experienced Interim CFO has
subsequently been appointed and the Board intends to review in due
course.
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
---------------------------------------------- -------------- ------------ -------------
Revenue 2 13,909 12,425 24,061
Cost of sales (9,850) (9,351) (18,294)
--------------------------------------- ------ -------------- ------------ -------------
Gross profit 4,059 3,074 5,767
Other operating income 109 - 383
Administrative expenses excluding
impairment (4,890) (5,887) (11,835)
Impairment loss on trade receivables - - (142)
Impairment charge on goodwill
and intangibles - - (8,473)
Impairment charge on property,
plant and equipment - - (5,481)
Operating loss (722) (2,813) (19,781)
--------------------------------------- ------ -------------- ------------ -------------
Analysed as:
Adjusted EBITDA* 1,453 362 533
Exceptional items 3 (189) (250) (479)
Depreciation (545) (1,295) (2,616)
Amortisation (1,445) (1,630) (3,233)
Impairment of goodwill and
intangibles - - (8,473)
Impairment charge on property,
plant and equipment - - (5,481)
Charges for share based
payments - - (32)
Profit on sale of assets 4 - -
Net financial costs (783) (966) (1,799)
Loss before taxation (1,505) (3,779) (21,580)
Income tax 240 200 3,103
--------------------------------------- ------ -------------- ------------ -------------
Loss for the period after
taxation (1,265) (3,579) (18,477)
--------------------------------------- ------ -------------- ------------ -------------
Other comprehensive income:
Items that are or may be classified
subsequently to profit or
loss:
Foreign exchange translation - - -
differences - equity accounted
investments
--------------------------------------- ------ -------------- ------------ -------------
Loss for the period and total
comprehensive income attributable
to equity holders of the parent (1,265) (3,579) (18,477)
--------------------------------------- ------ -------------- ------------ -------------
Basic and diluted loss per
share - continuing operations 4
Basic (pence per share) (0.31) (0.89) (4.61)
Diluted (pence per share) (0.31) (0.89) (4.61)
--------------------------------------- ------ -------------- ------------ -------------
* Earnings from continuing operations before net finance costs,
tax, depreciation, amortisation, impairment charges, share based
payments and exceptional costs
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------- --- ---------- ----------------- ----------------
Non-current assets
Intangible assets 9,788 16,546 11,429
Goodwill 196 3,115 -
Property, plant and equipment 705 8,433 1,208
Financial and other assets 2,284 1,821 3,539
------------------------------- --- ---------- ----------------- ----------------
12,973 29,915 16,176
------------------------------- --- ---------- ----------------- ----------------
Current assets
Trade and other receivables 5,736 5,330 5,444
Deferred tax asset 3,439 - -
Cash and cash equivalents 615 466 693
9,790 5,796 6,137
------------------------------- --- ---------- ----------------- ----------------
Total assets 22,763 35,711 22,313
------------------------------- --- ---------- ----------------- ----------------
Current liabilities
Borrowings 5 100 - 100
Trade and other payables 11,278 5,805 8,487
Contract liabilities 1,581 1,073 1,370
Taxation - 1,134 -
Finance lease obligations 620 1,195 431
Provisions 115 159 221
13,694 9,366 10,609
------------------------------- --- ---------- ----------------- ----------------
Non-current liabilities
Trade and other payables - - 1,584
Contract liabilities 15 62 15
Borrowings 5 14,656 13,330 13,987
Convertible loan notes 6 - 1,890 1,983
Finance lease obligations 545 1,545 860
Deferred tax liabilities 1,547 3,061 1,786
Provisions 91 192 91
16,854 20,080 20,306
------------------------------- --- ---------- ----------------- ----------------
Total liabilities 30,548 29,446 30,915
------------------------------- --- ---------- ----------------- ----------------
Net (liabilities)/assets (7,785) 6,265 (8,602)
------------------------------- --- ---------- ----------------- ----------------
Equity attributable to equity
holders of the parent
Called up share capital 12,417 10,020 10,020
Share premium account 35,439 35,439 35,439
Other reserves 502 817 817
Retained earnings (56,143) (40,011) (54,878)
Total equity (7,785) 6,265 (8,602)
------------------------------- --- ---------- ----------------- ----------------
Consolidated Statement of Changes in Equity
Share Share Equity Retained Foreign
capital premium Reserve earnings currency Total
(a) (b) (c) (d) translation
reserve
(e)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------- --------- --------- --------- ---------- -------------- ---------
At 1 January 2020 10,020 35,439 967 (36,433) (150) 9,843
Total comprehensive
income for the period
Loss for the financial
year and total comprehensive
income - - - (3,579) - (3,579)
At 30 June 2020 (unaudited) 10,020 35,439 967 (40,012) (150) 6,264
Total comprehensive
income for the period
Loss for the financial
year and total comprehensive
income - - - (14,898) - (14,898)
Transactions with
owners recorded directly
in equity
Share based payments - - 32 - 32
At 31 December 2020
(audited) 10,020 35,439 967 (54,878) (150) (8,602)
At 1 January 2021 10,020 35,439 967 (54,878) (150) (8,602)
Total comprehensive
income for the period
Loss for the period - - - (1,265) - (1,265)
Issue of new shares 2,397 - (315) - - 2,082
At 30 June 2021 (unaudited) 12,417 35,439 652 (56,143) (150) (7,785)
------------------------------- --------- --------- --------- ---------- -------------- ---------
(a) Share capital represents the nominal value of equity shares
(b) Share premium represents the excess over nominal value of
the fair value of consideration received for equity shares; net of
expenses of the share issue;
(c) The equity reserve consists of the equity component of
convertible loan notes that were issued as part of the fundraising
in August 2018 less the equity component of instruments converted
or settled.
The fair value of the equity component of convertible loan notes
issued is the residual value after deduction of the fair value of
the debt component of the instrument from the face value of the
loan note.
(d) Retained earnings represents retained profits and accumulated losses
(e) On consolidation, the balance sheets of the Group's foreign
subsidiaries are translated into sterling at the rates of exchange
ruling at the balance sheet date. Exchange gains or losses arising
from the consolidation of these foreign subsidiaries are recognised
in the foreign currency translation reserve.
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
----------------------------------------- ---- ------------ ------------ -------------
Loss for the period (1,505) (3,779) (21,580)
Adjustments for:
Depreciation of property, plant
and equipment 545 1,295 2,616
Amortisation of intangible assets 1,445 1,630 3,233
Impairment Charge - - 13,954
Net financial costs 783 966 1,799
Equity settled share-based payment
expenses - - 32
Profit on sale of fixed assets (4) - -
1,264 112 54
Decrease in trade and other receivables (2,477) 2,386 2,175
Decrease in trade and other payables 1,420 (1,565) (4)
Decrease in inventory - - -
(Decrease)/ increase in provisions (105) (71) (111)
102 862 2,114
Net corporation tax recovered/ - - -
(paid)
Net cash acquired from operating
activities 102 862 2,114
----------------------------------------------- ------------ ------------ -------------
Cash flow from investing activities:
Acquisition of Nimoveri, net
cash acquired - (52) (72)
Acquisition of property, plant
and equipment (43) (14) (82)
Proceeds from sale of fixed assets 4 - -
----------------------------------------- ---- ------------ ------------ -------------
Net cash used in investing activities (39) (66) (154)
----------------------------------------------- ------------ ------------ -------------
Cash flows from financing activities:
Repayment of lease liabilities (126) (887) (1,848)
Net interest paid (15) (122) (98)
Net cash absorbed by financing
activities (141) (1,009) (1,946)
----------------------------------------------- ------------ ------------ -------------
Net increase/ (decrease) in cash
and cash equivalents (78) (213) 14
Cash and cash equivalents at
beginning of period 693 679 679
Cash and cash equivalents at
end of period 615 466 693
----------------------------------------------- ------------ ------------ -------------
Being:
Cash and cash equivalents 615 466 693
615 466 693
---------------------------------------------- ------------ ------------ -------------
Notes to the half-yearly financial information
1. Basis of preparation
The condensed consolidated interim financial information for the
six-month period ended 30 June 2021 and 30 June 2020 is unaudited.
This statement has not been reviewed by the Company's auditor. This
condensed consolidated interim financial information was approved
by the Board of Directors and authorised for issue on 29(th)
September 2021. A copy of this half-yearly financial report is
available on the Company's website at www.idegroup.com .
The comparative figures for the financial year ended 31 December
2020 are extracted from but do not comprise the Group's
consolidated financial statements for that year.
The Company is a public limited liability company incorporated
and domiciled in Scotland. The address of its registered office is
24 Dublin Street, Edinburgh EH1 3PP. The Company is listed on the
AIM market of the London Stock Exchange.
IDE and its subsidiaries have not applied IAS 34, 'Interim
Financial Reporting' as adopted by the European Union, which is not
mandatory for UK AIM listed companies, in the preparation of this
half-yearly financial report.
This condensed consolidated interim financial information for
the six-month period ended 30 June 2021 therefore does not comply
with all the requirements of IAS 34, 'Interim Financial Reporting'
as adopted by the European Union. The consolidated interim
financial information should be read in conjunction with the annual
financial statements of the Company as at and for the year ended 31
December 2020, which were prepared in accordance with IFRS as
adopted by the European Union.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the year ended 31
December 2020 were approved by the Board of Directors on 21 July
2021 and delivered to the Registrar of Companies. The report of the
auditor was unqualified, did not contain an emphasis of matter
paragraph and did not contain a statement under section 498 (2) or
(3) of the Companies Act 2006.
Accounting policies
The accounting policies used in the preparation of the condensed
consolidated interim financial information for the six months ended
30 June 2021 are in accordance with the recognition and measurement
criteria of International Financial Reporting Standards ("IFRS") as
adopted by the European Union and are consistent with those that
will be adopted in the annual statutory financial statements for
the year ended 31 December 2020.
While the financial information included has been prepared in
accordance with the recognition and measurement criteria of IFRS,
as adopted by the European Union, these financial statements do not
contain sufficient information to comply with IFRSs. The accounting
policies adopted in the interim financial statements are consistent
with those adopted in the financial statements for the year ended
31 December 2020.
Exceptional items and other non-recurring items
Items which are material because of their size or nature, and
which are non-recurring are highlighted separately on the face of
the income statement. The separate reporting of exceptional items
helps provide a better picture of the Company's underlying
performance. Items which may be included within the exceptional
category include:
-- spend on major restructuring programmes;
-- significant goodwill or other asset impairments; and
-- other particularly significant or unusual items.
Exceptional items are excluded from the headline profit measures
used by the Group and are highlighted separately in the income
statement as management believe that they need to be considered
separately to gain an understanding the underlying profitability of
the trading businesses.
For further details, please refer to note 3.
Going concern
The condensed consolidated interim financial information has
been prepared on a going concern basis.
Taking into account the support of certain of the Company's
significant shareholders, of which the largest is represented on
the Board, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. For this reason, the Directors consider
that the adoption of the going concern basis is appropriate.
2. Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting to the Chief Operating Decision Maker ("CODM").
The CODM has been identified as the Executive Board. The Executive
Board is responsible for resource allocation and assessing the
performance of the operating segments. The operating segments are
defined by distinctly separate product offerings or markets. The
CODM assesses the performance of the operating segments based on a
measure of revenue and gross profit. The CODM does not review the
segmental assets and liabilities on a disaggregated basis and
therefore the information has not been provided.
The following table presents revenue and gross profit in respect
of the Group's operating segments for the six months ended 30 June
2021:
Unaudited for the six-month period ended 30 June 2021
IDE Group Manage IDE Group Connect Nimoveri Limited Central & inter-segment Total
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Revenue 7,807 6,313 39 (250) 13,909
Cost of Sales (4,248) (5,843) (9) 250 (9,850)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Gross profit 3,559 470 30 - 4,059
Other operating income 27 82 - - 109
Administrative expenses (1,564) (1,943) (14) (1,369) (4,890)
Operating profit/
(loss) 2,022 (1,391) 16 (1,369) (722)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Analysed as:
Adjusted EBITDA* 2,398 (616) 16 (337) 1,453
Depreciation (288) (257) - - (545)
Amortisation of
intangible assets - (416) - (1,029) (1,445)
Exceptional costs (88) (98) - (3) (189)
Profit on sale of
assets - 4 - - 4
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Net financial costs (4) (10) - (769) (783)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Loss before taxation 2,018 (1,401) 16 (2,138) (1,505)
Tax on loss on ordinary
activities (260) 500 - - 240
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Loss for the period
after taxation 1,758 (901) 16 (2,138) (1,265)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Unaudited for the six-month period ended 30 June 2020
IDE Group Manage IDE Group Connect Nimoveri Limited Central & inter-segment Total
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Revenue 6,787 6,058 - (420) 12,425
Cost of Sales (4,274) (5,580) - (503) (9,351)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Gross profit 2,513 478 - 83 3,074
Administrative expenses (2,418) (1,475) - (1,994) (5,887)
Operating profit/
(loss) 95 (997) - (1,911) (2,813)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Analysed as:
Adjusted EBITDA* 614 (135) - (117) 362
Depreciation (296) (406) - (593) (1,295)
Amortisation of
intangible assets - (451) - (1,179) (1,630)
Exceptional costs (223) (5) - (22) (250)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Net financial costs (9) (18) - (939) (966)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Loss before taxation 86 (1,015) - (2,850) (3,779)
Tax on loss on ordinary
activities - - - - 200
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
Loss for the period
after taxation 86 (1,015) - (2,850) (3,579)
------------------------ ----------------- ------------------ ----------------- ------------------------ --------
* Earnings from continuing operations before net finance costs,
tax, depreciation, amortisation, goodwill impairment, share based
payments and exceptional costs
Administrative expenses are not allocated against operating
segments in the Group's internal reporting. The statement of
financial position is not allocated between the operating segments
in the Group's internal reporting.
3. Exceptional costs
In accordance with the Group's policy in respect of exceptional
costs, the following charges were incurred in relation to
continuing operations:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
---------------------------------- ------------ ------------ -------------
Restructuring and reorganisation
costs 189 250 479
----------------------------------- ------------ ------------ -------------
4. Earnings per share from continuing operations
The calculation of basic and diluted loss per share is based on
results from continuing operations attributable to ordinary
shareholders divided by the weighted average number of ordinary
shares in issue during the year. The weighted average number of
shares for the purpose of calculating the basic and diluted
measures in the reporting periods is the same. This is because the
outstanding options would have the effect of reducing the loss per
ordinary share and therefore would be anti-dilutive under the terms
of IAS 33. Basic and diluted unaudited loss per share from
continuing operations are calculated as follows:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
----------------------------------- -------------- ------------ -------------
Loss attributable to shareholders (1,265) (3,579) (18,477)
Weighted average number of
shares 413,413,639 400,802,032 400,802,032
Diluted weighted average number
of shares 413,413,639 400,802,032 400,802,032
------------------------------------ -------------- ------------ -------------
Basic loss per share (pence) (0.31) (0.89) (4.61)
Diluted loss per share (pence) (0.31) (0.89) (4.61)
5. Borrowings
In January 2019 the Company issued GBP5.3 million of secured
loan notes with a six-year term and a 12% coupon which is
compounded, rolled up and payable at the end of the term ("Loan
Notes"). In February and March 2019, a further GBP4.7 million in
total of Loan Notes were issued. The Loan Notes carry an
arrangement fee of 2.5 per cent., payable at the end of the term,
and an exit fee of 2.5 per cent., also payable at the end of the
term.
In December 2019 the Company issued an additional GBP1.5 million
of Loan Notes (with the same terms as those issued in the first
quarter of the year).
The Loan Notes are held at amortised cost using the effective
interest rate method. The effective interest rate for the Loan
Notes has been calculated to be 18%.
On 1 June 2020, Group completed the acquisition of Nimoveri
Holdings Limited, a small cloud and IT services business, for a
total consideration of GBP0.2 million; GBP0.1 million paid in cash
on completion and the issue of GBP0.1 million 0% Loan Notes by IDE
Group Limited, a Group company (the "Nimoveri Loan Notes"). The
Nimoveri Loan Notes are secured over the assets of Nimoveri
Holdings Limited and redeemable on 31 December 2021.
Unaudited Audited
Six months Unaudited Year
ended Six months ended
30 June ended 31 December
2021 30 June 2020
GBP000 2020 GBP000
GBP000
------------- -------------- ------------- -------------
Non-Current
Loan Notes 14,656 13,330 13,987
-------------- -------------- ------------- -------------
Current
Loan Notes 100 - 100
-------------- -------------- ------------- -------------
6. Convertible Loan Notes
On 21 August 2018, as part of a wider fundraising, the Company
issued GBP2.55 million of unsecured loan notes, which have a term
of 5 years and a zero per cent coupon ("CLNs"). The CLNs can be
converted into new ordinary shares in the capital of IDE at a price
of 2.5 pence per share. Conversion is at the option of the holder
at any time during the 5-year term. At the end of the term, if the
holder has not chosen to convert the CLNs, the CLNs will be settled
with a cash repayment. At issue, the CLNs had a fair value of
GBP2.54 million, split into an equity component (GBP0.96 million)
and a debt component (GBP1.58 million).
.
Unaudited Audited
Six months Unaudited Year
ended Six months ended
30 June ended 31 December
2021 30 June 2020
GBP000 2020 GBP000
GBP000
-------------------------------- ---- -------------- ------------- -------------
Balance at beginning of period 1,983 1,803 1,803
Issue of new shares* (2,082) - -
Interest unwound 99 87 180
Total - 1,890 1,983
-------------------------------------- -------------- ------------- -------------
*On 7 June 2021 GBP2,397,519 of the unsecured convertible loan
notes issued in August 2018 were converted into 95,900,760 Ordinary
shares of 2.5p each, at a conversion price of 2.5p per share.
GBP2.1 million has been posted against the Consolidated Loan Notes
debt component in June 2021 and the balance of GBP0.3 million set
off against the Equity reserve.
Appendix 1. Proforma Consolidated Statement of Comprehensive
Income
Illustrating the effect of IDE Group Connect Ltd and Nimoveri
Ltd as discontinued operations
Unaudited
Six months
ended
30 June
2021
Note GBP000
--------------------------------------------- ----------------
Continuing Operations
Revenue 7,585
Cost of sales (4,028)
--------------------------------------- ----- ----------------
Gross profit 3,557
Other operating income 27
Administrative expenses excluding
impairment (2,932)
Operating profit 652
--------------------------------------- ----- ----------------
Analysed as:
Adjusted EBITDA* 2,061
Exceptional items (91)
Depreciation (289)
Amortisation (1,029)
Net financial costs (773)
Profit before taxation (121)
Income tax (260)
--------------------------------------- ----- ----------------
Loss for the period from continuing
operations attributable to
owners of the parent company (381)
Discontinued operations
Loss after tax for the year
from discontinued operations (884)
--------------------------------------- ----- ----------------
Loss for the period after
taxation (1,265)
--------------------------------------- ----- ----------------
Other comprehensive income:
Items that are or may be classified
subsequently to profit or
loss:
Foreign exchange translation -
differences - equity accounted
investments
--------------------------------------- ----- ----------------
Loss for the period and total
comprehensive income attributable
to equity holders of the parent (1,265)
--------------------------------------- ----- ----------------
Basic and diluted loss per
share - continuing operations 4
Basic (pence per share) (0.09)
Diluted (pence per share) (0.09)
--------------------------------------- ----------- ----------
* Earnings from continuing operations before net finance costs,
tax, depreciation, amortisation, impairment charges, share based
payments and exceptional costs
Appendix 2. Discontinuing operations Statement of Comprehensive
Income
Trading for the first six months of 2021 of IDE Group Connect
Ltd and Nimoveri Ltd combined
Unaudited
Six months
ended
30 June
2021
Note GBP000
---------------------------------------------- ----------------
Discontinued Operations
Revenue 6,325
Cost of sales (5,822)
---------------------------------------- ----- ----------------
Gross profit 503
Other operating income 82
Administrative expenses excluding
impairment (1,963)
Impairment loss on trade receivables -
Impairment charge on goodwill -
and intangibles -
Impairment charge on property,
plant and equipment
Profit on sale of assets 4
Operating profit (1,374)
---------------------------------------- ----- ----------------
Analysed as:
Adjusted EBITDA* (602)
Exceptional items (98)
Depreciation (257)
Amortisation
Impairment of goodwill and (417)
intangibles -
Impairment charge on property, -
plant and equipment
Net financial costs (10)
Loss before taxation (1,384)
Income tax 500
---------------------------------------- ----- ----------------
Loss for the period after
taxation (884)
---------------------------------------- ----- ----------------
Other comprehensive income:
Items that are or may be classified
subsequently to profit or
loss:
Foreign exchange translation -
differences - equity accounted
investments
---------------------------------------- ----- ----------------
Loss for the period and total
comprehensive income attributable
to equity holders of the parent (884)
---------------------------------------- ----- ----------------
Basic and diluted loss per
share - discontinuing operations 4
Basic (pence per share) (0.21)
Diluted (pence per share) (0.21)
---------------------------------------- ----------- ----------
* Earnings from continuing operations before net finance costs,
tax, depreciation, amortisation, impairment charges, share based
payments and exceptional costs
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END
IR FLFLDAFIAFIL
(END) Dow Jones Newswires
September 30, 2021 02:00 ET (06:00 GMT)
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