TIDMINSE
RNS Number : 4633K
Inspired PLC
02 September 2021
2 September 2021
Inspired PLC
("Inspired" or the "Group")
Results for the six months ended 30 June 2021
Inspired (AIM: INSE), a leading technology enabled service
provider supporting businesses in their drive to net zero,
controlling energy costs and managing their response to climate
change, announces its consolidated, unaudited half year results for
the six-month period ended 30 June 2021.
Financial Results
H1 2021 H1 2020 % change
*Restated
------------------------------ --------- --------- --------
Revenue GBP32.62m GBP24.94m 31%
Gross profit GBP24.09m GBP20.27m 19%
Adjusted EBITDA** GBP8.82m GBP7.64m 15%
Adjusted profit before tax*** GBP6.00m GBP5.08m 18%
Profit before tax GBP0.94m GBP0.95m -1%
Adjusted Diluted EPS**** 0.53p 0.66p -20%
Diluted Basic EPS 0.07p 0.14p -50%
Net Debt GBP30.17m GBP33.68m -10%
Order book GBP69.0m GBP61.5m 12%
Interim dividend per share 0.12p 0.10p 20%
------------------------------ --------- --------- --------
-- Half year revenue of GBP32.6 million, up 31% against 2020 (H1
2020: GBP24.9 million), achieving organic growth of 19% (H1 2020:
-5%) as the Group's customers, markets and economic activity
continues to recover.
-- Industrial and commercial energy consumption levels in H1
were in line with expectations, being 13% below 2019 levels in Q1
and 9% below in Q2, with H2 consumption to date reflecting the
continuing economic recovery from the pandemic.
-- Despite continued lockdown disruption, Optimisation Services
has shown a strong rebound in performance with revenue growth of
59% in H1 2021.
-- Group adjusted EBITDA increased 15%, to GBP8.8 million (H1 2020: GBP7.6 million).
-- The order book as at 30 June 2021 increased 12% to GBP69.0
million (H1 2020: GBP61.5 million).
-- Net debt of GBP30.2 million (2020: GBP33.7 million), a reduction of 10%.
-- Underlying cash generated from continuing operations
(excluding the impact of deal fees, restructuring costs and
repayment of Q2 2020 VAT deferrals) of GBP1.08 million (H1 2020:
GBP7.21 million) includes:
- GBP5.3 million increase in trade receivables in the period,
the majority of which relates to delayed payments from a small
number of significant optimisation customers, predominantly in the
public sector. Management fully expect to recover the balance
during H2 2021.
- Increase in accrued income on optimisation projects of GBP0.8
million due to timing, with projects restarting and progressed
during Q2 2021, with the relevant project invoices raised
subsequent to the half-year period end.
- Management expect cash conversion ratios in FY2021 onwards to
remain consistent with the levels seen in FY2020.
-- Interim dividend of 0.12 pence per share (H1 2020: 0.10
pence) in line with the Group's dividend policy.
Operational and acquisition highlights
-- Name change to Inspired PLC, reflecting the transition of the
business to a technology enabled, ESG service provider, supporting
clients to manage their response to climate change and deliver net
zero carbon.
-- Structured across three divisions and four reporting
segments, all underpinned by long term structural growth
drivers:
- Inspired Energy - Energy Solutions (comprising two reporting
segments, Energy Assurance Services and Energy Optimisation
Services)
- Inspired Software - Software Solutions
- Inspired ESG - ESG Solutions
-- Completed the acquisitions of Businesswise Solutions Limited
("Businesswise") and General Energy Management Limited ("GEM") in
March 2021.
Board changes
-- Richard Logan appointed Non-Executive Chairman (previously an
Independent Non-Executive Director) with Mike Fletcher retiring
from the position of Non-Executive Chairman after more than nine
years on the Board.
-- Sangita Shah and Dianne Walker appointed to the Board as
Independent Non-Executive Directors post period end, bringing a
wealth of experience, complementing the skill sets of the existing
Non-Executives, Sarah Flannigan and Richard Logan.
Current trading and outlook
The Group made further strategic progress during the first half
of the year, with a strengthened platform capable of generating
long term growth as its markets continue to recover from the period
of reduced energy consumption during the pandemic
Trading in the year to date in the core Energy Assurance
Services business remains in line with management's expectations
and is consistent with the Group's energy consumption
assumptions.
The Group's Energy Optimisation Services business began to
recover in the second quarter after significant disruption was
caused by further lockdowns implemented in Q1, resulting in an
overall performance for the half year that was in line with
management's expectations. Demand for optimisation services is
continuing to recover in H2 2021 as clients' attention turns to the
reopening of premises.
Software Solutions and the recently launched ESG Solutions
divisions continue to gain traction. The increasing focus of
investors and businesses on Net Zero Carbon targets, combined with
mandatory requirements for businesses to make ESG disclosures from
2022, provides a favourable backdrop to the strategy for the
Inspired ESG division.
Whilst uncertainties relating to the global pandemic remain and
should not be discounted, the Board continues to be excited and
confident in the longer-term prospects of the Group, underpinned by
the secular trend towards greater ESG focus and sustainable energy
usage. The Board remains confident of achieving current market
expectations, assuming no further significant Covid-19
disruption.
Commenting on the results, Mark Dickinson, CEO of Inspired,
said: "The rebound in the first half results in 2021 reflects the
continuing recovery in energy consumption, along with a return to
being able to access client premises to deliver energy optimisation
services."
"We are pleased by the current execution of the business plans
within the Software Solutions and ESG Solutions divisions, which,
although at an early stage, are developing strongly and we expect
further progress during 2022.
"As we have transitioned from Inspired Energy PLC to Inspired
PLC, we are well positioned to evolve our purpose as we help our
clients respond to Climate Change whilst controlling their costs.
Our objective is to evolve into the leading provider of services to
help businesses to respond to climate change and meet their net
zero targets."
* The H1 2020 income statement and cash flow statement have been
restated to reflect the impact of treating the SME Division as a
discontinued operation.
**Adjusted EBITDA is earnings before interest, taxation,
depreciation, and amortisation, excluding exceptional items and
share-based payments.
***Adjusted profit before tax is earnings before tax,
amortisation of intangible assets (excluding internally generated
amortisation related to computer software and customer databases),
exceptional items, share-based payments, the change in fair value
of contingent consideration and foreign exchange gains/(losses) (A
reconciliation of this can be found in note 3)
****Adjusted diluted earnings per share represents the diluted
earnings per share, as adjusted to remove amortisation of
intangible assets (excluding internally generated amortisation
related to computer software and customer databases), exceptional
items, share-based payments, the change in fair value of contingent
consideration and foreign exchange gains/(losses).
For further information, please contact:
Inspired PLC www.inspiredplc.co.uk
Mark Dickinson, Chief Executive Officer +44 (0) 1772 689 250
Paul Connor, Chief Financial Officer
Shore Capital (Nomad and Joint Broker) +44 (0) 20 7408 4090
Edward Mansfield
James Thomas
Michael McGloin
Peel Hunt LLP (Joint Broker)
Mike Bell
Ed Allsopp +44 (0) 20 7418 8900
Alma PR +44 (0) 20 3405 0205
Justine James +44 (0) 7525 324431
David Ison Inspired@almapr.co.uk
Molly Gretton
Chairman's Statement
I'm delighted to report that in my first statement as Chairman
that your Board is pleased with the strategic progress delivered
during a period in which our customers' businesses, and the economy
more broadly, continued to recover. Whilst the financial
performance of the Group for H1 2021 continued to be impacted by
the legacy challenges caused by the pandemic, as conditions
normalise, the Group's underlying performance will continue to
strengthen.
Board changes
On 1 July 2021, I was pleased to assume the role of
Non-Executive Chairman having served as the senior independent
Non-Executive Director of the Group since 2017, succeeding our
retiring Chairman Mike Fletcher who had been a member of the Board
since the Group's IPO.. On behalf of the Board and all at Inspired,
I wish to thank Mike for his invaluable contribution throughout his
time on the Board.
Subsequent to the period end, the Board has been strengthened
and I am delighted to welcome Sangita Shah, who will chair the
Remuneration Committee, and Dianne Walker, who will chair the Audit
and Risk Committee, to the Board as independent Non-Executive
Directors with effect from 1 July 2021 and 4 August 2021
respectively. Both bring a wealth of varied and extensive
experience complementing the skill sets of our existing Board
members.
The Board now consists of two Executive Directors supported by a
Non-Executive Chairman and three independent Non-Executive
Directors , representing a broader mix of skills and diversity to
align with the Group's evolving strategy.
Acquisitions and equity fundraising
In March 2021, the Board was delighted to conclude the
acquisitions of Businesswise and GEM, which are highly
complementary additions to the Group. The GBP35m fundraising
completed in July 2020 provided greater capacity and flexibility
with which to capitalise on acquisition opportunities, which were
carefully structured in light of the economic uncertainty. Both
acquisitions completed in the period increase our market share for
Energy Assurance services, broaden our customer base and
significantly increase our units of opportunity.
We are pleased to welcome the Businesswise and GEM teams to the
Group.
Dividend
Since its IPO in 2011, Inspired has established a track record
of delivering profitable and cash-generative growth which has
facilitated a consistent and progressive dividend policy.
The pandemic brought a temporary halt to dividend payments,
which were re-established with a 2020 interim dividend of 0.10
pence declared in September 2020 and a final 2020 dividend of 0.12
pence proposed in March 2021. The Board remains confident in the
Group's prospects and is therefore declaring an interim dividend of
0.12 pence (2020: 0.10 pence). The dividend aligns with the Board's
stated policy of a dividend cover of at least 3x earnings, with the
objective of delivering progressive dividend growth over time.
The interim dividend will be paid on 8 December 2021 to all
shareholders on the register at close of business on 15 October
2021. The shares will be marked ex-dividend on 14 October 2021.
Staff
On behalf of the Board, I would like to thank our employees who
continue to overcome the challenges that we have faced in what was
an unprecedented time. Their health and wellbeing remains our
priority. During this challenging time, we have continued to invest
in our valued team and the business and are well positioned for
growth as we emerge from the pandemic.
Richard Logan
Chairman
1 September 2021
CEO's Statement
I am pleased to report on the Group's results for H1 2021 as we
look to cement our position as the leading independent provider of
technology enabled services to help businesses respond to climate
change.
The first half of 2021 has seen a notable upturn in performance
of the Inspired Energy Solutions Division in Q2, with the easing of
lockdown restrictions that had continued to impact the first
quarter, and continued acquisition activity following the
completion of two transactions.
Proportionate recovery
The recovery in Group performance is correlated with the easing
of restrictions relating to the global COVID-19 pandemic. Q1 saw
restrictions remaining in place for longer than expected which had
a significant impact on the delivery of Energy Optimisation
Services, but otherwise the rate of recovery has been as expected
and we remain confident of meeting our full year market
expectations.
M&A execution
The completion of the acquisitions of Businesswise and GEM in Q1
2021 saw the conclusion of our accelerated M&A process for
Energy Assurance Businesses from our fundraising in 2020.
The Group has completed the integration of GEM into our core
Inspired Energy brand and the focus is now on providing additional
services to the GEM client base. Businesswise is being operated as
a challenger brand catering for clients who prefer a more boutique
service and is performing in line with our first-year expectations.
The introduction of Businesswise has allowed us to complete the
integration of E&CM (acquired via the acquisition of Inprova
Finance Limited in Dec 2018) and to realise the final identified
synergies through the restructuring of that business.
We continue to build and appraise our M&A pipeline with a
particular focus on adding further acquisitions to the Energy
Optimisation Services and Software Solutions divisions.
Energy Solutions Division
Energy Assurance Services
The Energy Assurance business continues to recover in line with
the general economy and is the cornerstone of the business both in
terms of heritage and scale. Record high energy prices have led to
delays in some contract renewals and a shortening of duration when
renewals are secured. Despite an absolute increase in the order
book due to the contribution of the acquired order books in the
period, high energy prices has led to a contraction of the
underlying order book in H1 2021, and is likely to continue into
H2. This is an expected cyclical impact when energy prices are
high, which we do not expect to impact revenues.
Energy Optimisation Services (Net Zero Carbon Solutions)
Our Energy Optimisation Services business was significantly
disrupted in Q1 2021 as the exit from lockdown was delayed.
However, we experienced a recovery in Q2 2021 and optimisation
services are expected, on a blended basis, to perform in line with
full year expectations.
The increasing focus of investors and businesses on Net Zero
Carbon is creating significant demand for our optimisation services
which in turn provides a significant and sustainable growth
opportunity as operating conditions normalise. In addition, Energy
Optimisation Services provides a balancing diversification of risk
in relation to the rising energy prices that create an element of
inertia in the Energy Assurance Services business as return on
capital for projects improves as energy prices rise.
Software Solutions Division
Our Software Solutions Division creates the proprietary software
used by the Group to underpin its technology enabled services, as
well as by third parties under a SaaS model. Currently the software
is supporting the following user base:
Account Type Number of companies CARO Users Unify Users
TPIs 58 10,719 1,649
-------------------- ----------- ------------
Private Sector 18 1,219 -
-------------------- ----------- ------------
Central Government 1 - -
-------------------- ----------- ------------
Education 38 1,068 -
-------------------- ----------- ------------
Health 23 87 -
-------------------- ----------- ------------
Local Authorities 119 14,172 -
-------------------- ----------- ------------
Police and Fire 7 49 -
-------------------- ----------- ------------
Other 1 - -
-------------------- ----------- ------------
Total 265 27,314 1,649
-------------------- ----------- ------------
CARO is the combined result of the STC and Systemslink
acquisitions creating proprietary software that allows the
collection, analysis, reporting and optimisation (CARO) of energy
and sustainability data. Unify is the applications platform which
allows CARO to be combined with latest solutions and developments
created by the division.
Providing software to c.50% of the public sector, a significant
growth opportunity exists to evolve the installed user base to the
Unify Platform. However, the primary growth opportunity for this
division is the ability to provide valuable data-led services to a
growing number of successful energy advisors whilst generating
recurring SaaS revenues. In the first half of 2021 the number of
TPIs that use the platform increased from 50 to 58.
ESG Solutions Division
During the first half of 2021 we reclassified some of the Energy
Optimisation Services Division activities that are more directly
focussed on ESG reporting into a new standalone ESG Solutions
business. This has led to a much cleaner organisational structure
and focus on solutions for the client.
In addition to providing services to existing clients, we have
found that our ESG offering has resulted in winning new clients,
with four public companies signed up since the start of the year,
representing a diverse range of sectors.
The ESG Solutions Division is benefiting from the regulatory
tail winds resulting from the increased mandatory disclosure
obligations.
Outlook
The second half of the year to date has continued in line with
management expectations. Whilst we need to remain cognisant of the
risks posed by a potential resurgence in the global pandemic, under
current market conditions we remain confident of meeting market
expectations for the year.
On behalf of the Board, I would like to thank our staff,
customers and wider stakeholders for their continued support.
Mark Dickinson
Chief Executive Officer
1 September 2021
CFO's Statement
H1 2021 has been a period in which we have seen a 31% increase
in revenue and 15% increase in Adjusted EBITDA, as we continue to
see energy consumption and economic activity recover from the
challenges presented by the pandemic. Following the significant
impact of the COVID-19 pandemic in the first half of 2020, Group
organic revenues showed a strong recovery in 2021, increasing 19%
(H1 2020: -5%) partly driven by a recovery in energy consumption by
our assurance customers and, as anticipated, the resumption of
optimisation projects in Q2 2021.
Divisional Performance
Energy Solutions Division
The Energy Solutions Division comprises of Energy Assurance
Services and Energy Optimisation Services.
2021 trading to date in the Energy Assurance Services business
remains in line with management's expectations and consistent with
the Group's energy consumption assumptions, being approximately 13%
below 2019 levels in Q1, and 9% below 2019 levels in Q2.
Energy Assurance Services generated 55% of Group revenues in H1
2021 (H1 2020: 62%) being GBP17.9 million (H1 2020: GBP15.4
million) an increase of 16%. Energy Assurance Services contributed
adjusted EBITDA of GBP8.3 million, an increase of 6% (H1 2020:
GBP7.8 million). In normal market conditions and post full
integration of acquisitions, management's view is that the division
will generate EBITDA margins of c.50%.
The Group's Energy Optimisation Services (part of the Energy
Solutions Division) business was more significantly disrupted in
Q1, as a result of further lockdowns. Q2 2021 has seen demand for
optimisation services beginning to recover with the blended
performance in H1 2021 in line with management's expectations.
Demand for optimisation services is continuing to recover in H2
2021 as clients' attention turns to the reopening of their
premises.
Energy Optimisation Services generated 40% of Group revenues in
H1 2021 (H1 2020: 33%) being GBP13.2 million (H1 2020: GBP8.3
million) an increase of 59%. Energy Optimisation Services
contributed adjusted EBITDA of GBP1.5 million (H1 2020: GBP0.4
million), with H1 2020 margins being heavily impacted by the
lockdowns in Q2 2020, following a strong start in Q1 2020. Despite
the disruption to the division, we have continued to invest in the
talent within the Optimisation Services team to accelerate the
growth of the division as the economy recovers.
The Energy Optimisation Services EBITDA margins have also
continued to recover in H1 2021. Once operating at full capacity,
management's view is that the division will generate EBITDA margins
of 20-25%.
Software Solutions Division
The Group's Software Solutions Division revenues grew by 15% to
of GBP1.2 million (H1 2020: GBP1.0 million) generating Adjusted
EBITDA of GBP1.0 million (H1 2020: GBP0.8 million), with the
division generating a strong sustainable EBITDA margin in excess of
80%.
ESG Solutions Division
The ESG Solutions division revenues relate to the provision of
sustainability related services, including Streamlined Energy and
Carbon Reporting (SECR), Energy Savings Opportunity Scheme (ESOS)
and Task Force on Climate-Related Financial Disclosures (TCFD). We
remain encouraged by the prospects of the Group's recently launched
ESG Disclosure product. The increasing requirements of Corporate
Businesses to make mandatory ESG disclosures in 2022 provides a
favourable back drop to our strategy for the ESG Solutions Division
and we will continue our organic entry into this market.
Order Book
The Corporate Order Book as at 30 June 2021 increased 12% year
on year to GBP69.0 million (H1 2020: GBP61.5 million). The
Corporate Order Book as at 31 December 2020 was GBP63.0 million,
increasing further to GBP73.0 million following the acquisition of
Businesswise Solutions and GEM in March 2021. Although Group
revenues and profits are not directly impacted by changes in energy
commodity prices, as expected, the timing at which assurance
customers contract, and the duration of those contracts, can be
affected. Market conditions, including record high commodity prices
in H1 2021, have led to customers delaying renewals of supply
contracts, which is predominantly the point at which assurance
customers contract with the Group. Management believes this is a
point of timing, not contraction of demand, with customer retention
remaining strong during the period.
As expected, PLC costs were GBP2.0 million (H1 2020: GBP1.5
million), in line with H2 2020 run rate resulting in an overall
adjusted EBITDA for the period of GBP8.8 million (H1 2020: GBP7.6
million). After deducting charges for depreciation, amortisation of
internally generated intangible assets and finance expenditure the
adjusted profit before tax for the year GBP6.0 million (H1 2020:
GBP5.1 million).
A full reconciliation of the Group's adjusted profit before tax
to its reported profit before tax is included at note 3. The items
included in the reconciliation include substantial charges for the
amortisation of intangible assets as a result of acquisitions,
share based payment charges, fees associated with acquisitions,
restructuring costs and the changes in the fair value of contingent
consideration.
Cash generation
Underlying cash generated from continuing operations (excluding
the impact of deal fees, restructuring costs and repayment of Q2
2020 VAT deferrals) of GBP1.08 million (H1 2020: GBP7.21 million).
Cash conversion was materially impacted in the period by a GBP5.3
million increase in trade receivables in the period from delayed
payment by a small number of significant optimisation invoices,
predominantly from customers in the public sector.
Furthermore, H1 2021 saw an increase in accrued income on
Optimisation projects of GBP0.8m due to timing, with projects
restarting and progressing during Q2 2021, with the relevant
project invoices raised subsequent to the period end.
H1 2021 cash conversion was also impacted by the repayment of
GBP0.6 million of deferred VAT from Q2 2020. This compares to a
GBP2.7 million cash flow benefit received in H1 2020 comparative as
a result of the deferral of PAYE and NIC (GBP1.7 million) and VAT
(GBP1.0 million), plus the benefit received in H1 2020 from short
term cash flow management measures taken at the onset of the
pandemic.
Management expect cash conversion ratios in FY2021 and beyond to
remain consistent with the levels seen in FY2020.
We received contingent consideration from the disposal of the
SME division in December 2020 of GBP0.7m in the period.
Exceptional costs
Exceptional costs of GBP2.0 million (H1 2020: GBP0.3 million)
were incurred in the period, which GBP0.8 million of deal fees
associated with acquisitions completed in the period.
Restructuring costs of GBP0.2 million have been incurred in the
year, which includes termination payments from the restructuring of
the acquisitions completed in the previous periods.
Furthermore, a GBP0.9 million loss (equating purely to the
unwinding of discounting) from changes in the fair value of
contingent consideration (H1 2020: GBP0.1 million) were treated as
exceptional in the period.
These costs are considered by the Directors to be material in
nature and non-recurring and therefore require separate
identification to give a true and fair view of the Group's result
for the period.
Financial position and liquidity
As at 30 June 2021, the Group's net debt was GBP30.2 million. In
addition to cash and cash equivalents of GBP15.6 million on hand,
as at 30 June 2021, approximately GBP14.0 million of the Group's
GBP60.0 million Revolving Credit Facility is undrawn with an
additional GBP25.0 million accordion option available, subject to
covenant compliance.
In March 2021, the Board agreed with their lenders to amend the
definition of Adjusted Net Leverage to apply from the 1 July 2021,
to reverse the impact of the adoptions of IFRS 16 and the
definition of contingent consideration to only included deferred
consideration or crystalised contingent consideration.
Collectively, these amends significantly reduce the forecast
leverage of the Group for covenant purposes.
Dividend
The Board announced the reinstatement of dividend payments with
a 2020 interim dividend of 0.10 pence declared in September 2020
and a final 2020 dividend of 0.12 pence declared in March 2021
subsequent to the pandemic bringing a temporary halt to dividend
payments.
It follows that the Board is pleased to announce an interim
dividend of 0.12 pence per share (2020: 0.10 pence) in line with
the Groups' revised policy of paying dividends initially covered by
at least 3.0x earnings.
The dividend will be payable on 8 December 2021 to all
shareholders on the register on 15 October 2021 and the shares will
go ex-dividend on 14 October 2021.
In summary
The strategic and financial initiatives delivered in the period,
ensure the Group is well placed to endure the continued economic
uncertainty generated by COVID-19, and in turn facilitate the
effective implementation of our strategic growth plan as envisaged
prior to the COVID-19 crisis as the economic recovery
continues.
Paul Connor
Chief Financial Officer
1 September 2021
Group Statement of Comprehensive Income
For the six months ended 30 June 2021
Year ended
31 December
2020
Six months
Six months ended 30
ended 30 June 2020
June 2021 (unaudited
(unaudited) & restated) (audited)
Note GBP000 GBP000 GBP000
------------------------------- ----- ------------- ------------- -------------
Revenue 32,616 24,942 46,110
Cost of sales (8,525) (4,670) (7,210)
------------- ------------- -------------
Gross profit 24,091 20,272 38,900
Administrative expenses (22,562) (18,021) (40,723)
------------- ------------- -------------
Operating profit/(loss) 1,529 2,251 (1,823)
------------- ------------- -------------
Analysed as:
Earnings before exceptional
costs, depreciation,
amortisation and share-based
payment costs 8,819 7,644 12,767
Fees associated with
acquisition (803) (159) (1,366)
Restructuring costs (238) (73) (990)
Change in fair value
of contingent consideration (938) (90) (1,157)
Depreciation (937) (858) (1,173)
Amortisation of acquired
intangible assets (2,741) (2,571) (6,038)
Amortisation of internally
generated intangible
assets (1,069) (762) (2,268)
Share-based payment
costs (564) (880) (1,598)
------------- ------------- -------------
1,529 2,251 (1,823)
------------------------------- ----- ------------- ------------- -------------
Finance expenditure (644) (1,299) (2,678)
Other financial items 50 - (35)
------------- ------------- -------------
Profit/(loss) before
income tax 935 952 (4,536)
Income tax (expense)/credit (178) (209) 251
------------- ------------- -------------
Profit/(loss) for
the period from continuing
operations 757 743 (4,285)
------------- ------------- -------------
Profit/(loss) for
the period from discontinued
operations - 365 (6,740)
------------- ------------- -------------
Profit/(loss) for
the period 757 1,108 (11,025)
------------- ------------- -------------
Attributable to:
Non-controlling interest - 1,025 1,448
Equity owners of the
company 757 83 (12,473)
------------- ------------- -------------
Other comprehensive
income:
Exchange differences
on translation of
foreign operations (760) 966 364
------------- ------------- -------------
Total other comprehensive
(expense)/income for
the year (760) 966 364
============= ============= =============
Total comprehensive
(expense)/income for
the year (3) 2,074 (10,661)
============= ============= =============
Total comprehensive
(expense)/income from
continuing operations (3) 1,709 (3,921)
============= ============= =============
Total comprehensive
income/(expense) from
discontinued operations - 365 (6,740)
============= ============= =============
Attributable to:
Non-controlling interest - 1,025 1,448
Equity owners of the
company (3) 1,049 (12,109)
Note
Diluted earnings per
share attributable
to the equity holders
of the Company (pence) 3 0.07 0.14 (1.34)
Adjusted diluted earnings
per share attributable
to the equity holders
of the Company (pence) 3 0.53 0.66 0.70
------------------------------- ----- ------------- ------------- -------------
Group Statement of Financial Position
At 30 June 2021
Six months Six months
ended 30 ended 30 Year ended
June 2021 June 2020 31 December
(unaudited) (unaudited) 2020 (audited)
Note GBP000 GBP000 GBP000
----------------------------- ----- ------------- ------------- ----------------
ASSETS
Non-current assets
Investments 898 897 898
Goodwill 6 73,730 52,559 63,776
Other intangible assets 6 18,027 17,454 16,351
Property, plant and
equipment 4 2,357 3,398 2,322
Right of use assets 5 3,142 3,651 2,593
98,154 77,959 85,940
Current assets
Trade and other receivables 7 26,981 30,225 18,960
Deferred contingent
consideration 6,217 - 6,925
Cash and cash equivalents 15,565 11,759 26,884
------------- ------------- ----------------
48,763 41,984 52,769
Total assets 146,917 119,943 138,709
------------- ------------- ----------------
LIABILITIES
Current liabilities
Trade and other payables 8 7,948 12,388 8,230
Lease liabilities 527 1,294 992
Current tax liability 2,497 2,615 2,456
Contingent consideration 7,551 1,470 7,741
18,523 17,767 19,419
Non-current liabilities
Bank borrowings 45,730 45,439 45,730
Lease liabilities 2,207 2,123 1,679
Contingent consideration 11,005 264 4,198
Deferred tax liability 2,032 2,040 1,278
Interest rate swap 80 156 130
61,054 50,022 53,015
Total liabilities 79,577 67,789 72,434
------------- ------------- ----------------
Net assets 67,340 52,154 66,275
============= ============= ================
EQUITY
Share capital 1,216 898 1,202
Share premium account 67,490 37,422 67,000
Merger relief reserve 20,995 15,535 20,995
Retained earnings (9,661) 6,802 (10,418)
Share based payments
reserves 5,913 4,403 5,349
Investment on own
shares (6,742) (6,742) (6,742)
Translation reserve (488) 873 272
Reverse acquisition
reserve (11,383) (11,383) (11,383)
Equity attributable
to shareholders 67,340 47,808 66,275
Non-controlling interest - 4,346 -
Total equity 67,340 52,154 66,275
============= ============= ================
Group Statement of Cash Flows
For the six months ended 30 June 2021
Six months
Six months ended 30
ended 30 June 2020 Year ended
June 2021 (unaudited 31 December
(unaudited) & restated) 2020 (audited)
Note GBP000 GBP000 GBP000
---------------------------------- ----- ------------ ------------ ---------------
Cash flows from operating
activities
Profit/(loss) before
income tax 935 1,317 (11,276)
Adjustments
Depreciation 937 880 1,173
Amortisation 3,810 3,339 8,306
Share based payment costs 564 880 1,598
Loss for the year from
discontinued operations - (365) 6,740
Finance expenditure 594 1,300 2,678
Exchange rate variances (377) (206) (323)
Other financial items 938 90 1,157
Cash flows before changes
in working capital 7,401 7,235 10,053
Movement in working capital
(Increase)/decrease in
inventories (254) 242 (43)
(Increase) / decrease
in trade and other receivables (6,490) (910) 154
(Decrease)/increase in
trade and other payables (1,165) 3,109 (925)
Dividends declared to
NCI - - (900)
Cash generated from operations (508) 9,676 8,339
------------ ------------ ---------------
Income taxes paid (313) (1,304) (2,222)
Net cash flows from operating
activities (821) 8,372 6,117
Cash flows from investing
activities
Purchase of property,
plant and equipment (393) (1,063) (1,925)
Payments to acquire intangible
assets (2,242) (1,533) (3,716)
Contingent consideration
paid (600) (3,250) (3,800)
Contingent consideration
received 708 - -
Provision of working
capital facility to discontinued
operation (300) - (250)
Acquisition of subsidiary,
net of cash (6,530) (120) (5,866)
Net cash flows from investing
activities (9,357) (5,966) (15,557)
Cash flows from financing
activities
New bank loans - 7,000 7,000
Finance expenses (764) (982) (2,273)
Repayment of lease liabilities (825) (305) (918)
Proceeds from issue of
new shares 504 6 29,848
Dividends paid to NCI - (1,650) (1,650)
Dividends paid - - (924)
------------ ------------ ---------------
Net cash flows from financing
activities (1,085) 4,069 31,083
Net (decrease)/increase
in cash and cash equivalents (11,263) 6,475 21,643
Cash and cash equivalents
brought forward 26,884 5,241 5,241
Exchange differences
on cash and cash equivalents (56) 43 -
------------ ------------ ---------------
Cash and cash equivalents
carried forward 15,565 11,759 26,884
============ ============ ===============
Group Statement of Changes in Equity
For the six months ended 30 June 2021
Share Merger Share-based Investment Reverse Total
Share premium relief payment Retained in own Translation acquisition Non-controlling shareholders'
capital account reserve reserve earnings shares reserve reserve interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
January 2020 892 37,422 15,535 3,523 6,719 (6,742) (92) (11,383) 13,465 59,339
------- ------- ------- ----------- -------- ----------- ------------ ----------- --------------- -------------
(Loss)/profit
for the period - - - - (12,473) - - - 1,448 (11,025)
Other
comprehensive
income - - - - - - 364 - - 364
Total
comprehensive
income for the
period - - - - (12,473) - 364 - 1,448 (10,661)
Share-based
payment cost - - - 1,598 - - - - - 1,598
Shares issued
(2 June 2020) 6 - - - - - - - - 6
Shares issued
(10 July 2020) 89 10,620 - - - - - - - 10,709
Shares issued
(17 July 2020) 40 - 5,460 - - - - - - 5,500
Shares issued
(28 July 2020) 172 18,958 - - - - - - - 19,130
Shares issued
(15 September
2020) 3 - - - - - - - - 3
Acquisition of
subsidiary
undertaking - - - - (3,740) - - - (14,163) (17,903)
Disposal of
subsidiary
undertaking - - - 228 - - - - - 228
Dividends paid - - - - (924) - - - (750) (1,674)
------- ------- ------- ----------- -------- ----------- ------------ ----------- --------------- -------------
Total
transactions
with owners 310 29,578 5,460 1,826 (17,137) - 364 - (13,465) 6,936
------- ------- ------- ----------- -------- ----------- ------------ ----------- --------------- -------------
Balance at 31
December 2020 1,202 67,000 20,995 5,349 (10,418) (6,742) 272 (11,383) - 66,275
------- ---------------
Profit for the
period - - - - 757 - - - - 757
Other
comprehensive
income - - - - - - (760) - - (760)
Total
comprehensive
income for the
period - - - - 757 - (760) - - (3)
Share-based
payment cost - - - 564 - - - - - 564
Shares issued
(8 April 2021) 13 376 - - - - - - - 389
Shares issued
(22 June 2021) 1 114 - - - - - - - 115
---------------
Total
transactions
with owners 14 490 - 564 757 - (760) - - 1,065
------- ------- ------- ----------- -------- ----------- ------------ ----------- --------------- -------------
Balance at 30
June 2021 1,216 67,490 20,995 5,913 (9,661) (6,742) (488) (11,383) - 67,340
------- ------- ------- ----------- -------- ----------- ------------ ----------- --------------- -------------
1. Accounting Policies
Basis of preparation
The financial information set out in this announcement does not
constitute the statutory accounts of the Group for the period ended
30 June 2021. Whilst the financial information included in this
interim announcement has been computed in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRS). They have been prepared on an accrual basis
and under the historical cost convention except for certain
financial instruments measured at fair value. This announcement in
itself does not contain sufficient information to comply with
IFRS.
Details of the accounting policies are those set out in the
annual report for the year ended 31 December 2020. The accounting
policies in this announcement are consistent with those set out in
the annual report for the year ended 31 December 2020.
2. Segmental information
Revenue and segmental reporting
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Group's Executive Directors.
In previous years we reported under 2 operating segments, Corporate
and SME. Following the decision to dispose of the SME Division, the
Group has been restructured into 4 reporting segments, namely
Assurance, Optimisation, Software and ESG. The H1 2020 comparatives
have been restated to remove the SME segment and to report the
previous periods figures under the revised segmental structure.
Six months ended 30 June 2021 Six months ended 30 June 2020 (restated)
Assurance Optimisation Software ESG PLC Total Assurance Optimisation Software ESG PLC Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 17,877 13,174 1,179 386 - 32,616 15,397 8,292 1,024 229 - 24,942
Cost of sales (1,298) (7,195) (32) - - (8,525) (643) (4,014) (13) - - (4,670)
------------- --------- ------------ -------- ------ ------- -------- --------- ------------ -------- ------ ------- --------
Gross profit 16,579 5,979 1,147 386 - 24,091 14,754 4,278 1,011 229 - 20,272
------------- --------- ------------ -------- ------ ------- -------- --------- ------------ -------- ------ ------- --------
Overheads (8,467) (4,495) (173) (360) (4,320) (17,815) (6,977) (3,841) (176) (171) (2,665) (13,830)
------------ -------- ------ -------
EBITDA 8,112 1,484 974 26 (4,320) 6,276 7,777 437 835 58 (2,665) 6,442
------------- --------- ------------ -------- ------ ------- -------- --------- ------------ -------- ------ ------- --------
Analysed as:
Adjusted
EBITDA 8,321 1,484 974 26 (1,986) 8,819 7,838 450 835 58 (1,537) 7,644
Share-based
payments - - - - (564) (564) - - - - (880) (880)
Exceptional
costs (209) - - - (1,770) (1,979) (61) (13) - - (248) (322)
--------- ------------ --------- ------------ -------- ------ ------- --------
8,112 1,484 974 26 (4,320) 6,276 7,777 437 835 58 (2,665) 6,442
--------- ------------ -------- ------ ------- -------- --------- ------------ -------- ------ ------- --------
Depreciation (937) (858)
Amortisation (3,810) (3,333)
Finance
expenditure (644) (1,299)
Other
financial
items 50 -
-------- --------
Profit before
income tax 935 952
-------- --------
3. Earnings Per Share
The earnings per share is based on the net profit for the period
attributable to ordinary equity holders divided by the weighted
average number of ordinary shares outstanding during the
period.
Year ended
31 December
2020
Six months Six months
ended 30 ended 30
June 2021 June 2020
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------------ ------------- ------------- -----------------
Profit/(loss) attributable
to equity holders of the
Group 757 1,108 (11,025)
Loss on disposal of subsidiary
entities - - 6,740
Amortisation of acquired
intangible assets 2,741 2,571 6,038
Deferred tax in respect of
amortisation (465) (282) (1,025)
Changes in fair value of
contingent consideration 938 90 1,157
Foreign exchange variation (224) 353 253
Fees associated with acquisition 803 159 1,366
Share-based payments costs 564 880 1,598
Restructuring costs 238 73 990
Covenant reset arrangement - 110 -
fee/accelerated write off
of capitalised debt facility
arrangement fees upon refinancing
Adjusted profit attributable
to equity holders of the
Group 5,352 5,062 6,092
------------- ------------- -----------------
Weighted average number of
ordinary shares in issue
(000) 966,784 714,562 824,647
Dilutive effect of share
options (000) 44,674 51,810 49,107
------------- ------------- -----------------
Diluted weighted average
number of ordinary shares
in issue (000) 1,011,458 766,372 873,754
------------- ------------- -----------------
Basic earnings per share
(pence) 0.08 0.15 (1.34)
Diluted earnings per share
(pence) 0.07 0.14 (1.34)
Adjusted basic earnings per
share (pence) 0.55 0.71 0.74
Adjusted diluted earnings
per share (pence) 0.53 0.66 0.70
Year ended
31 December
2020
Six months Six months
ended 30 ended 30
June 2021 June 2020
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
--------------------------------- ------------- ------------- -------------
Profit/(loss) attributable
to equity holders of the
Group 757 1,108 (11,025)
(Profit)/loss from discontinued
operations - (365) 6,740
Underlying profit/(loss)
from continuing operations
attributable to equity holders
of the Group 757 743 (4,285)
------------- ------------- -------------
Weighted average number of
ordinary shares in issue
(000) 966,784 714,562 824,647
Dilutive effect of share
options (000) 44,674 51,810 49,107
Diluted weighted average
number of ordinary shares
in issue (000) 1,011,458 766,372 873,754
------------- ------------- -------------
Basic earnings per share
from continuing operations
(pence) 0.08 0.10 (0.52)
Diluted earnings per share
from continuing operations
(pence) 0.07 0.10 (0.52)
The weighted average number of shares in issue for the adjusted
diluted earnings per share include the dilutive effect of the share
options in issue to senior staff of Inspired.
Adjusted earnings per share represents the earnings per share,
as adjusted to remove the effect of the fees associated with
acquisition, amortisation of intangible assets (excluding
amortisation related to computer software and customer databases),
share-based payments and exceptional items which have been expensed
to the income statement in the period. Adjusted profit before tax
is calculated as follows:
Year ended
31 December
2020
Six months
Six months ended 30
ended 30 June 2020
June 2021 (unaudited
(unaudited) & restated) (audited)
GBP000 GBP000 GBP000
----------------------------------- ------------- ------------- -------------
Profit/(loss) before tax 935 952 (4,536)
Share-based payments costs 564 880 1,598
Amortisation of acquired
intangible assets 2,741 2,571 6,038
Foreign exchange variation (224) 353 253
Exceptional costs:
Fees associated with acquisition 803 159 1,366
Restructuring costs 238 73 990
Change in fair value of
contingent consideration 938 90 1,157
Adjusted profit before tax 5,995 5,078 6,866
------------- ------------- -------------
Acquisitional activity can significantly distort underlying
financial performance from IFRS measures and therefore the Board
deems it appropriate to report adjusted metrics as well as IFRS
measures for the benefit of primary users of the Group financial
statements.
4. Property, plant and equipment
Motor
Fixtures and fittings vehicles Computer equipment Leasehold improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
As at 1 January 2020 843 141 2,683 1,047 4,714
Acquisitions through
business combinations 22 - - - 22
Assets transferred to
disposal group (12) - (11) (17) (40)
Assets transferred to
intangible assets - - (1,338) - (1,338)
Foreign exchange
variations - 3 1 1 5
Additions 200 29 1,624 72 1,925
Disposals (116) (15) (547) (511) (1,189)
At 31 December 2020 937 158 2,412 592 4,099
Additions 2 - 418 - 420
Disposals - - (27) - (27)
At 30 June 2021 939 158 2,803 592 4,492
--------------------- --------- ------------------ ---------------------- -------
Depreciation
As at 1 January 2020 617 60 1,097 256 2,030
Charge for the year 221 21 75 254 571
Charge transferred to
intangible assets - - (380) - (380)
Assets transferred to
disposal group (10) - (10) (8) (28)
Disposals (85) (11) (144) (176) (416)
At 31 December 2020 743 70 638 326 1,777
Charge for the period 59 1 242 56 358
At 30 June 2021 802 71 880 382 2,135
--------------------- --------- ------------------ ---------------------- -------
Net Book Value
At 30 June 2021 137 87 1,923 210 2,357
--------------------- --------- ------------------ ---------------------- -------
At 31 December 2020 194 88 1,774 266 2,322
--------------------- --------- ------------------ ---------------------- -------
5. Right of use assets
Fixtures and fittings Motor vehicles Property Total
GBP000 GBP000 GBP000 GBP000
Cost
As at 1 January 2020 472 319 3,869 4,660
Acquisitions through business combinations - - 156 156
Remeasurement of Finance lease - - (347) (347)
Asset transferred to disposal group - (66) - (66)
Disposals (5) (164) (352) (521)
Additions 23 225 - 248
At 31 December 2020 490 314 3,326 4,130
Acquisitions through business combinations - 5 114 119
Additions - 105 919 1,024
Disposals - (72) (49) (121)
At 30 June 2021 490 352 4,310 5,152
--------------------- -------------- -------- -------
Depreciation
As at 1 January 2020 69 103 778 950
Charge for the year 69 125 788 982
Asset transferred to disposal group - (56) - (56)
Disposals - (86) (253) (339)
At 31 December 2020 138 86 1,313 1,537
Charge for the period 38 67 474 579
Disposals - (57) (49) (106)
At 30 June 2021 176 96 1,738 2,010
--------------------- -------------- -------- -------
Net Book Value
At 30 June 2021 314 256 2,572 3,142
--------------------- -------------- -------- -------
At 31 December 2020 352 228 2,013 2,593
--------------------- -------------- -------- -------
6. Intangible assets and goodwill
Tangible
Computer Trade Customer Customer Customer other
software name databases contracts relationships intangibles Goodwill Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January
2020 11,945 115 1,654 17,210 7,511 38,435 61,627 100,062
Additions 3,615 - 101 - - 3,716 - 3,716
Acquisitions
through
business
combinations 37 - - 583 - 620 3,241 3,861
Transfer from
property,
plant and
equipment 1,338 - - - - 1,338 - 1,338
Impairment (188) - - - - (188) - (188)
Assets
transferred
to disposal
group (432) - (1,755) - - (2,187) (1,208) (3,395)
Foreign
exchange
variances - - - 283 - 283 116 399
At 31
December
2020 16,315 115 - 18,076 7,511 42,017 63,776 105,793
Additions 2,305 46 - - - 2,351 - 2,351
Acquisitions
through
business
combinations 9 - - 3,490 - 3,499 10,057 13,556
Disposals (110) - - - - (110) - (110)
Foreign
exchange
variance - - - (254) - (254) (103) (357)
At 30 June
2021 18,519 161 - 21,312 7,511 47,503 73,730 121,233
---------- --------- --------- --------- -------------- ----------- -------- -------
Amortisation
As at 1
January 2020 5,983 24 1,571 9,560 2,410 19,548 - 19,548
Charge for
the period 2,895 6 - 4,022 815 7,738 - 7,738
Charge for
the year
transferred
from
property,
plant and
equipment 380 - - - - 380 - 380
Assets
transferred
to disposal
group (429) - (1,571) - - (2,000) - (2,000)
At 31
December
2020 8,829 30 - 13,582 3,225 25,666 - 25,666
Charge for
the year 1,258 4 - 2,141 408 3,811 - 3,811
Disposals (1) - - - - (1) - (1)
---------- --------- --------- --------- -------------- ----------- -------- -------
At 30 June
2021 10,086 34 - 15,723 3,633 29,476 - 29,476
---------- --------- --------- --------- -------------- ----------- -------- -------
Net Book
Value
At 30 June
2021 8,433 127 - 5,589 3,878 18,027 73,730 91,757
---------- --------- --------- --------- -------------- ----------- -------- -------
At 31
December
2020 7,486 85 - 4,494 4,286 16,351 63,776 80,127
---------- --------- --------- --------- -------------- ----------- -------- -------
Computer software is a combination of assets internally
generated and assets acquired through business combinations.
Amortisation charged in the period to 30 June 2021 associated with
computer software acquired through business combinations is
GBP190,000. The additional GBP1,068,000 charged in the period
relates to the amortisation of internally generated computer
software.
7. Trade and other receivables
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------------ ------- --------- -------------
Trade receivables 12,282 7,651 6,995
Other receivables 1,179 1,635 416
Prepayments 3,620 2,648 2,764
Accrued income 9,900 18,291 8,785
------------------ ------- --------- -------------
26,981 30,225 18,960
------------------ ------- --------- -------------
8. Trade and other payables
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
-------------------------------- ------- --------- -------------
Trade payables 2,317 1,206 1,943
Social security and other taxes 2,626 5,739 4,162
Accruals 1,674 1,947 866
Deferred income 559 2,935 745
Other payables 772 561 514
-------------------------------- ------- --------- -------------
7,948 12,388 8,230
-------------------------------- ------- --------- -------------
9. Availability of this announcement
This announcement together with the financial statements herein
and a presentation in respect of the interim financial results are
available on the Group's website, www.inspiredplc.co.uk
This information is provided by RNS, the news service of the
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END
IR EAXNFEAXFEFA
(END) Dow Jones Newswires
September 02, 2021 02:00 ET (06:00 GMT)
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