TIDMING
RNS Number : 2142M
Ingenta PLC
20 September 2021
20 September 2021
Ingenta plc
Interim Results
Ingenta plc (AIM: ING), ("Ingenta", the "Company" or the
"Group") a leading provider of world-class software and services to
the global publishing industry, is pleased to announce its
unaudited interim results for the six months to 30 June 2021.
Financial Key Points
-- Group revenues GBP5.1m (2020: GBP5.2m)
-- 85% of Group revenues recurring in nature (2020: 82%)
-- Gross profit margin 47% (2020: 44%)
-- Adjusted EBITDA(*) up 34% to GBP0.7m (2020: GBP0.6m)
-- Cash from operations up 10% to GBP1.3m (2020: GBP1.2m)
-- Cash balances increased to GBP3.1m (31 December 2020: GBP2.3m)
-- Cash generation of GBP0.8m (2020: GBP0.9m)
-- Earnings per share of 2.26 pence (2020: 2.10 pence)
-- 0.235m shares repurchased under share buy-back programme
-- Introduction of a progressive dividend policy with an interim 1p per share payment
Operational Key Points
-- 2 Edify deployments completed in the period
-- 2 IP Management deployments in the period
-- Major infrastructure project completed to improve the resilience of hosting services
-- Company profile substantially de-risked with an ongoing annual cost base of GBP9.5m
(*) Earnings before Interest, Tax, Depreciation and Amortisation
is calculated before foreign exchange differences and restructuring
costs. See Statement of Comprehensive Income for reconciliation
As previously announced on 15 September 2021, Ingenta will be
presenting via the Investor Meet Company platform on 23 September
2021 at 15.30 (BST). To sign up to the Ingenta presentation for
free via Investor Meet Company please click the following link:
https://www.investormeetcompany.com/ingenta-plc/register-investor
.
Martyn Rose, Chairman of Ingenta plc, commented:
"The results for the first half of the year have been solid with
an underlying theme of improved operational efficiency. The Group
has embraced a flexible working model and invested in the necessary
infrastructure to further improve resiliency and the breadth of our
service offering. In tandem, a new sales and marketing approach is
being rolled out to widen our reach and improve penetration into
adjacent vertical markets. The current economic climate has
somewhat dampened results in this area, but we remain optimistic
that deals can be concluded in the coming months.
"Additionally, the recurring revenue base of the Group continues
to improve and is the result of a reinvigorated focus on project
delivery along with customer uptake of a broad layer of service
options that are increasingly relevant to businesses changing
needs.
"Financially, I'm pleased to report the Group has continued to
deliver strong operating cash inflows of GBP1.3m (2020: GBP1.2m)
which has enabled us to invest in forward looking infrastructure to
deliver our services whilst also facilitating a share buyback
programme. Given our consistent levels of cash generation and
balance sheet strength, we are aiming to instigate a dividend
policy which pays out 50% of normalised annual free cashflows.
Consequently, we intend to pay an interim dividend of 1p per share
for the 2021 financial year with a final dividend to be
communicated in due course.
Certain information contained in this announcement would have
been deemed inside information as stipulated under the UK version
of the EU Market Abuse Regulation (2014/596) which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018, as
amended and supplemented from time to time, until the release of
this announcement.
For further information please contact:
Ingenta plc Tel: 01865 397 800
Scott Winner / Jon Sheffield
Cenkos Securities plc Tel: 0207 397 8900
Nicholas Wells / Katy Birkin
Financial Review
The Group continues to focus on operational enhancements which
have increased profitability in the first half of the year.
Recurring revenue percentages remain strong at 85% and are being
driven by the efficient implementation of projects plus the
continued uptake of Vista as a Service.
Statement of Comprehensive Income
Although Group revenue remained flat at GBP5.1m (2020: GBP5.2m),
efficiency gains have delivered improved profitability with growth
in our reported gross profit of GBP2.4m (2020: GBP2.3m). Sales and
marketing expenses were also stable but there has been a change in
strategy as the Group focus on more digital campaigns in light of
Covid restrictions. Administrative expenses increased slightly to
GBP1.7m (2020: GBP1.6m) and reflect the investment in a Head of
Professional Services but also include a GBP150,000 uplift in
depreciation. The depreciation increase represents the investments
made in infrastructure to support and grow the Group's hosting
capabilities which further boosts recurring revenues.
Profit from operations remained at GBP0.4m (2020: GBP0.4m) and,
with negligible interest, taxation and exchange costs, the Group
delivered earnings per share of 2.26 pence (2020: 2.10 pence).
Statement of Cash Flows and Financial Position
The Group's cash inflow from operations improved during the
period and amounted to GBP1.3m (2020: GBP1.2m). Other significant
expenditure included GBP0.2m of lease payments on equipment to
bolster the hosting infrastructure as mentioned above. As
previously announced, the Group has continued to exercise its share
buyback authority and purchased a further 235,000 shares for a
combined consideration of GBP0.2m (2020: nil). Closing cash
balances amounted to GBP3.1m (2020: GBP3.5m).
Outlook
The Group will continue its strategy of driving efficiency gains
and we anticipate further benefits as we renegotiate infrastructure
contracts and look to leverage offshore resources. Recurring
revenue remains strong and is being driven by a streamlined
implementation methodology, which was successfully rolled out in
our Content business and is now being deployed across Commercial
projects. Whilst new sales activity remains difficult to predict,
we have a pipeline of new opportunities from both existing and new
customers which we look forward to converting in the coming
months.
Jon Sheffield
Chief Financial Officer
Unaudited Condensed Consolidated Interim Statement of
Comprehensive Income
Unaudited Unaudited
Six months Six months
ended ended
30 June 2021 30 June 2020
Note GBP'000 GBP'000
Revenue 5,106 5,208
Cost of sales (2,692) (2,923)
------------- -------------
Gross profit 2,414 2,285
Sales and marketing expenses (353) (328)
Administrative expenses (1,673) (1,587)
Profit from operations 388 370
Finance costs (14) (8)
Profit before tax 374 362
Tax - 9
Retained profit for the period 374 371
Other comprehensive expenses which
will be reclassified subsequently
to profit or loss:
Exchange differences on translating
foreign operations 2 (17)
Total comprehensive profit for the
period 376 354
Basic profit per share - pence 4 2.26 2.10
------------- -------------
Diluted profit per share - pence 4 2.18 2.02
Analysis of profit from operations:
Profit before net finance costs,
tax, depreciation and amortisation,
restructuring costs and foreign exchange
gains and losses (adjusted EBITDA) 748 560
Depreciation (293) (139)
Amortisation (50) (50)
Foreign exchange gain / (loss) (14) 32
Restructuring costs (3) (33)
------------- -------------
Profit from operations 388 370
Unaudited Condensed Consolidated Interim Statement of Financial
Position
Unaudited Unaudited
30 June 2021 30 June 2020
Note GBP'000 GBP'000
Non-current assets
Goodwill 3 2,661 2,661
Other intangible assets 3 8 108
Property, plant & equipment 889 465
3,558 3,234
Current assets
Trade and other receivables 5 1,434 1,650
Cash and cash equivalents 3,102 3,537
4,536 5,187
Total assets 8,094 8,421
-------------- --------------
Equity
Share capital 1,692 1,692
Merger reserve 11,055 11,055
Reverse acquisition reserve (5,228 ) (5,228)
Translation reserve (837 ) (897)
Share option reserve 80 42
Retained earnings (2,982 ) (2,760)
3,780 3,904
Non-current liabilities
Deferred tax liability 2 22
Leases 336 75
-------------- --------------
338 97
Current liabilities
Trade and other payables 6 1,817 1,997
Deferred income 2,159 2,423
-------------- --------------
3,976 4,420
Total equity and liabilities 8,094 8,421
-------------- --------------
Unaudited Condensed Consolidated Interim Statement of Changes in
Equity
Share Share Merger Reverse Translation Share Retained Total
capital premium reserve acquisition reserve option Earnings
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2021 1,692 0 11,055 (5,228) -839 61 (3,175) 3,566
Shares bought
back into treasury - - - - - - (181) (181)
Share based
payment expense - - - - - 19 - 19
Transactions
with owners 0 0 0 0 0 19 -181 -162
--------- --------- --------- ------------- ------------ --------- ---------- --------
Profit for the
period - - - - - - 374 374
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - - 2 - - 2
--------- --------- --------- ------------- ------------ --------- ---------- --------
Total comprehensive
income / (expense)
for the period - - - - 2 - 374 376
--------- --------- --------- ------------- ------------ --------- ---------- --------
Balance at 30
June 2021 1,692 - 11,055 -5,228 (837) 80 (2,982) 3,780
--------- --------- --------- ------------- ------------ --------- ---------- --------
Share Share Merger Reverse Translation Share Retained Total
capital premium reserve acquisition reserve option Earnings
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2020 1,692 - 11,055 (5,228) (880) 23 (3,131) 3,531
Share based
payment expense - - - - - 19 - 19
--------- --------- --------- ------------- ------------ --------- ---------- --------
Transactions
with owners - - - - - 19 - 19
--------- --------- --------- ------------- ------------ --------- ---------- --------
Profit for the
period - - - - - - 371 371
Other comprehensive
income:
Exchange differences
on translation
of foreign operations - - - - (17) - - (17)
--------- --------- --------- ------------- ------------ --------- ---------- --------
Total comprehensive
income / (expense)
for the period - - - - (17) - 371 354
--------- --------- --------- ------------- ------------ --------- ---------- --------
Balance at 30
June 2020 1,692 - 11,055 (5,228) (897) 42 (2,760) 3,904
--------- --------- --------- ------------- ------------ --------- ---------- --------
Unaudited Condensed Consolidated Interim Statement of Cash
Flows
Unaudited Unaudited
Six months Six months
ended ended
30 June 2021 30 June 2020
Note GBP'000 GBP'000
Profit before tax 374 362
Adjustments for:
Depreciation and amortisation 343 189
Share based payment expense 19 19
Interest expense 14 8
Unrealised foreign exchange differences 2 (17)
Decrease in trade and other receivables 784 1,560
Decrease in trade and other payables (260) (961)
Cash inflow from operations 1,276 1,160
Tax Paid - -
Net cash inflow from operating activities 1,276 1,160
Cash flows from financing activities
Shares bought back into treasury (181) -
Payment of leases (239) (151)
Interest paid (14) (8)
------------- -------------
Net cash used in financing activities (434) (159)
Cash flows from investing activities
Purchase of property, plant and equipment (63) (65)
Net cash used in investing activities (63) (65)
Net increase in cash and cash equivalents 779 936
Cash and cash equivalents at beginning
of period 2,323 2,601
Cash & cash equivalents at end of period 3,102 3,537
------------- -------------
Notes to the Unaudited Interim Report for the six months ended
30 June 2021
1. Nature of operations and general information
Ingenta plc (the "Company") and its subsidiaries (together "the
Group") is a provider of technology and supporting services to
content providers and publishers. The nature of the Group's
operations and its principal activities are set out in the full
annual financial statements.
The Company is incorporated in the United Kingdom under the
Companies Act 2006. The Company's registration number is 00837205
and its registered office is 8100 Alec Issigonis Way, Oxford OX4
2HU. The condensed consolidated interim financial statements were
authorised for issue by the Board of Directors on 20 September
2021.
The financial information set out in this interim report does
not constitute statutory accounts as defined in section 404 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2020, prepared under IFRS as adopted by
the European Union, have been filed with the Registrar of
Companies. The auditor's report on those financial statements was
unqualified and did not contain a statement under section 498 (2)
or section 498 (3) of the Companies Act 2006.
2. Basis of preparation
These unaudited condensed consolidated interim financial
statements are for the six months ended 30 June 2021. They have
been prepared following the recognition and measurement principles
of IFRS in conformity with the requirements of the Companies Act
2006. They do not include all of the information required for full
annual financial statements and should be read in conjunction with
the consolidated financial statements of the Group for the year
ended 31 December 2020.
These condensed consolidated interim financial statements have
been prepared on the going concern basis under the historical cost
convention and have been prepared in accordance with the accounting
policies adopted in the last annual financial statements for the
year ended 31 December 2020.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
consolidated interim financial statements.
A detailed set of accounting policies can be found in the annual
accounts available on our website, www.ingenta.com or by writing to
the Company Secretary at the registered office as above.
3. Goodwill and Intangibles
Full details of the Group's policies on Goodwill and Intangibles
is presented in the financial statements for the year ended 31
December 2020.
4. Profit per share
Basic profit per share is calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
For diluted profit per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares.
Six months Six months
ended ended
30 June 2021 30 June 2020
Attributable profit (GBP'000) 376 354
Weighted average number of
ordinary basic shares (basic) 16,625,214 16,853,505
Weighted average number of
ordinary shares (diluted) 17,306,459 17,534,750
Profit per share (basic) arising
from both total and continuing
operations 2.26p 2.10p
Profit per share (dilutive)
arising from both total and
continuing operations 2.18p 2.02p
5. Trade and other receivables
Trade and other receivables comprise the following:
30 June 2021 30 June 2020
GBP'000 GBP'000
Trade receivables - gross 1,148 1,318
Less: provision for impairment
of trade receivables (142) (161)
------------- -------------
Trade receivables - net 1,006 1,157
Other receivables 76 69
Prepayments and accrued income 352 424
1,434 1,650
6. Trade and other payables
Trade payables comprise the following:
30 June 2021 30 June 2020
GBP'000 GBP'000
Trade payables 211 470
Social security and other
taxes 383 374
Other payables 631 660
Accruals 592 493
1,817 1,997
7. Contingencies and commitments
There were no contingencies or commitments at the end of this or
the comparative period.
8. Post balance sheet events
There were no material events subsequent to the end of the
interim reporting period that have not been reflected in the
interim financial statements.
9. Copies of the Interim Financial Statements
A copy of the interim statement is available on the Company's
website, www.ingenta.com , and from the Company's registered
office, 8100 Alec Issigonis Way, Oxford OX4 2HU.
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