TIDMJNEO
RNS Number : 4103T
Journeo PLC
25 March 2021
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR").
25 March 2021
Journeo plc
Final results for year ended 31 December 2020
("Journeo" or "the Group")
Journeo plc (AIM: JNEO), the information systems and transport
technical services group, announces its final results for the year
ended 31 December 2020.
Financial headlines
-- Revenue increased 19% to GBP13.6m (2019: GBP11.4m)
-- Gross profit increased 17% to GBP5.3m (2019: GBP4.5m)
-- Underlying profit before tax GBP0.5m (2019: loss of GBP0.8m)
-- Profit before tax GBP0.2m (2019: loss of GBP0.9m)
-- Profit before tax excluding share-based payments GBP0.3m (2019: loss of GBP0.9m)
-- Cash and cash equivalents at 31 December 2020 GBP1.3m (2019: GBP0.7m)
-- Diluted earnings per share 2.26p (2019: loss per share of 1.08p)
Operational headlines
-- Business has adapted well to remote working and continued to
provide support services during the challenging environment brought
about by the Coronavirus pandemic.
-- Journeo is increasingly being seen as a technology provider,
solving complex operational requirements within our towns and urban
centres.
-- Increased adoption of Journeo technologies amongst the
Group's Fleet Operator customers, with 50 customers and over 3,000
vehicles connected to Journeo's platforms, assisting the Fleet
Systems business to grow recurring revenue.
-- Passenger segments delivered 43% growth for year-on-year
sales revenues as a result of flagship orders received for
passenger information and associated infrastructure technologies,
including the City of Edinburgh Council and a northern transport
partnership.
-- Investment in research and development continues to build our
own IP; early customer adoption of Journeo's full-colour LED and
low-power/renewables based display technology.
Russ Singleton, CEO of Journeo plc, said: "The Government's
decision to continue to support national infrastructure projects
during the Covid-19 pandemic provided us with opportunities and a
degree of stability during the year. More than ever, our customers
are looking for solutions that provide enhanced functionality,
reduced carbon emissions and improved economics. Our ability to
leverage existing systems and apply our R&D capabilities in a
"customer-led, applied development" model differentiates us at a
time when our customers are focused on solutions that lengthen the
lifecycle of existing assets.
"2021 has started encouragingly, with purchase orders and
contract awards valued at GBP4.2m announced during Q1. There is
also a rising level of enquiries and sales opportunities in our
order pipeline, which is now predominantly based upon our own IP,
technologies, and software.
"The UK Government's GBP2.4bn Transforming Cities Fund ("TCF")
and the recent release of the National Bus Strategy for England, to
help deliver on the GBP3bn commitment to carbon zero solutions in
public transport, will provide us with further opportunities in the
years to come.
"Journeo is now positioned to capture an increasing share of a
sizeable, dynamic and growing market. The combination of an
increasing demand for our technologies and software with
significant government funding, underpins our confidence and
ambitious growth plans. "
For further information, please contact:
Journeo plc
Russ Singleton/ Nick Lowe +44 (0) 844 871 7990
WH Ireland - Nominated Adviser and Broker
Mike Coe/ Chris Savidge +44 (0) 117 945 3470
Communications Portfolio
Ariane Comstive +44 (0) 7785 922 354
Notes to editors:
Journeo plc is an information systems and technical services
business focussed on public transport and related infrastructure
within towns, cities, airports, and local authorities. The Group
works extensively with local government departments, combined
authorities, and many of the largest multinational transport
operators, supporting them as systems converge towards a more
efficient and sustainable smarter-cities future.
The business currently comprises two segments:
-- Fleet operator solutions: CCTV video surveillance to improve
passenger & driver safety, telematics for vehicle and driver
performance monitoring, real-time communications for remote
condition monitoring and automatic passenger counting.
-- Passenger infrastructure solutions: design, manufacture,
installation, and management of hardware and software for
electronic public transport information systems, in and around
towns, cities, ferry terminals and airports which includes
smart-ticketing and wayfinding.
In the last few years, the Group has invested around GBP5m in
research and development, enabling it to design and supply the very
best solutions for customers' complex requirements and the demands
of modern public transport. With an Internet of Things (IoT)
approach and open standards, together with field-proven and
reliable engineering, Journeo is able to offer flexible, scalable
products and services that can integrate with existing technology
while preparing for future advancements.
Chairman's Statement
Introduction
This time last year, as I began to draft my statement for the
Annual Report 2019, the world had just entered the coronavirus
pandemic, which has turned out to be a prolonged period of
significant disruption and change that still persists. The
incredible work of key workers in supporting the nation and our
scientists in developing vaccines which are now being rolled out in
record time, points to a more encouraging future as economies
recover.
The impact of Covid-19 on public transport and international
travel throughout 2020 has been well documented. However, whilst
there were many challenges, critical national infrastructure
projects that are considered vital to the future of our country,
including those within Transforming Cities Fund ("TCF"), continued
to be supported by the Government. This provided Journeo with
opportunities and a degree of stability during the year.
It is in light of this, that the Group was able to improve
revenues and profits and, importantly, continued to make progress
with the adoption of our technologies within target customer
segments.
Trading Results
Group results for the year ended 31 December 2020 show an
underlying profit of GBP464k (2019: loss of GBP777k).
Overall sales increased by GBP2.2m to GBP13.6m (2019: GBP11.4m)
and gross profit increased to GBP5.3m (2019: GBP4.5m).
Passenger sales increased by 43% to GBP6.8m (2019: GBP4.8m).
Margins reduced to 47% (2019: 55%) due to a higher proportion of
new system installations, and gross profit increased to GBP3.2m
(2019: GBP2.6m).
Fleet sales increased by 3% to GBP6.8m (2019: GBP6.6m) despite
the falling passenger numbers for the operators after the March
2020 lockdown. Gross profit increased to GBP2.1m (2019: GBP1.9m)
with an improvement in margins to 31% (2019: 29%).
Underlying administrative expenses decreased to GBP5.1m (2019:
GBP5.5m) with lower levels of non-essential expenditure during
lockdown periods.
The profit after a charge for share based payments of GBP0.1m
(2019: nil) and before tax was GBP0.2m (2019: loss of GBP0.9m).
Placing
Following the placing in December 2019 which raised GBP1.2m
before expenses, the Group had a remaining authority to issue a
smaller number of shares. In April 2020, 513,750 shares were placed
raising a further GBP256,875.
The net cash position at 31 December 2020 was GBP1.3m (31
December 2019: GBP0.7m).
Markets update
Operator reluctance to invest in new bus fleets began well
before the pandemic, as operators looked to lengthen the lifecycle
of their existing assets whilst low and zero carbon bus technology
matured. Travel restrictions in 2020 meant that public transport
and international travel were amongst the first sectors to be
severely affected by the pandemic and many continue to be so. As a
result, our customers face prolonged and difficult operating
conditions; and therefore more than ever are looking for solutions
that provide enhanced functionality and improved economics.
While public transport infrastructure faced many operational
challenges through the course of 2020, those that are considered of
national importance were prioritised by the Government and were
able to continue once the required health and safety measures were
put in place. This allowed Journeo to continue operations and
pre-sales support work whilst also delivering on a number of
projects already in progress during the year.
We fully support the ongoing UK Government commitments to invest
in town and City infrastructure, through schemes such as the
GBP2.4bn Transforming Cities Fund ("TCF"), which drives innovation
and improves the flow of people and goods in and around our smarter
cities and urban centres. We look forward to working with the
Enhanced Partnerships that are expected to form following the
recent release of the National Bus Strategy for England, to help
deliver on the GBP3bn commitment to carbon zero solutions in public
transport.
Brexit & Covid-19
Leaving the European Union has created a number of challenges
for the Group resulting from increased transport costs, delivery
delays and additional bureaucracy. In addition, one of the many
effects of the coronavirus pandemic has been an increase in the
number of people working from home, which in turn led to an
increased demand for laptops, phones, and tablets; and the key
semiconductors and display components that they comprise. We build
our display systems using many of the same world class components
and have been carefully working with our supply chain partners to
prevent shortages and minimising, where possible, increases in raw
material costs. The Group is continuously monitoring these
important factors and quickly takes corrective actions to optimise
component stocks, maintain efficient production schedules and
adjust pricing to protect margins.
Strategy
Journeo's strategy is to seek, identify and then solve current
or anticipated future requirements in specific target segments
within public transport infrastructure and passenger transport
operations. We do this where we see a potential for increased
market share of a growing market, due to technology transition or
convergence, and where we see significant scale potential for
resale of the core technology and our valuable IP on a worldwide
basis.
Our mission is to form deep, trusted, and long-lasting customer
bonds and profound, real-life end user insights and apply our
R&D capabilities in a "customer-led, applied development"
model.
The Group's ability to leverage existing systems and deliver
customers with enhanced functionality through the IoT,
differentiates us. Since the launch of Journeo's cloud-based
platform in November 2019, we have seen adoption of our solution
steadily grow. We currently have 50 companies and over 3,000
vehicles connected to our platforms with the ability to access a
growing range of vital in-service information and data analytics
safely, securely, and remotely.
In conjunction with our corporate social responsibility aims and
our drive to improve sustainability, we have been investing in
renewable energy powered technologies for some time now. Recent
announcements regarding GBP1.1m of purchase orders for our low
energy consumption, solar-powered displays technology is
encouraging, and we have other 'renewables'-based solutions in
development that are due to come to market later this year.
An increasing number of our own products, software and scalable
solutions form the core of our sales opportunity pipeline and
underpin our order books and support our ambitions for organic
growth in 2021 and beyond. We also see opportunities to enhance
this profitable growth through acquisition, where this provides a
route to new or adjacent markets for our core capabilities,
technologies, and Intellectual Property (IP).
Environment, Social and Governance
The Board takes its Environmental, Social and Governance (ESG)
responsibilities seriously. In addition to seeking to comply with
the QCA Corporate Governance Code, Journeo has in place
international trademarks and recognised accreditations for
Information Security Management System (ISO 27001:2013), Quality
Management (ISO 9001:2015), Environmental Quality Management (ISO
14001:2015) and Occupational Health and Safety (ISO 45001:2018).
Together these systems embed a strong culture of sound ethical
values and behaviours within the Group.
As the world emerges from the restrictions that have come about
as a result of the pandemic, the Board is focused on delivering
solutions that benefit a green and sustainable recovery. Through a
combination of low power components that leverage our IoT systems
infrastructure, our technologies and software can play an
increasing part in the wider smart-city goals of developed
nations.
In 2020, the Board initiated a process to formalise Journeo's
sustainability strategy to embed this within the Group's wider
strategy. Over the next few months, an initial review of
sustainability and ESG activities will be completed, identifying
issues of importance to internal and external stakeholders, as part
of developing a more sustainable vision and strategy in the medium
to long-term.
This work is ongoing and over the course of the next 12-months
we will complete the baseline review and materiality assessment. We
will aim to improve sustainability messaging to explain our
approach more clearly towards reducing carbon emissions and our
responsibilities to our communities and staff. We plan to issue a
sustainability report, within the Annual Report due for release in
2022.
People
We continue to place the safety of our people and our customers
first. Our teams have adjusted well to the new working paradigm,
and infrastructure that was previously in place to allow remote
working, has proved invaluable to the continued development of the
Group. A small number of staff were placed on to the Government
furlough scheme, for a very short period, with the remainder
continuing in full time employment throughout the pandemic here in
the UK and Sweden. This 'new normal' meant a change not only to how
we engage internally, but also to how we address and reach our
customers in order to understand their needs and deliver the
solutions they require. Our teams reacted admirably to this task
and I would like to take the opportunity to thank all team members
for their continued dedication and hard work as we strive to
further improve the position of the Group.
Outlook
At the present time, there is a good degree of uncertainty about
the precise timing and structure of the post-Coronavirus recovery
here in the UK, and more so in parts of the Far East and Asia,
where many of our supply chain partners are based, and Continental
Europe, where we have an operating centre and a number of major
customers.
We have delivered on our plans for FY2020, whilst navigating a
path through the unprecedented challenges presented by the pandemic
and remain confident that our customer-led, applied development
strategy is working and is the right way forward.
2021 has started encouragingly, with purchase orders and
contract awards valued at GBP4.2m announced during Q1. There is
also a rising level of enquiries and sales opportunities in our
pipelines, which are now predominantly based upon our own IP,
technologies, and software.
The GBP2.4bn Transforming Cities Fund and the recently announced
GBP3bn National Bus Strategy (Bus Back better) are significant
Government commitments to increase the use of public transport in
and around our congested cities over the next few years. These
powerful market drivers will lead to the creation of new,
world-class passenger-friendly infrastructure, and at the same time
provide the commercial impetus for fleet operators to invest in new
technologies and carbon-zero vehicles.
Journeo is well placed to capture an increasing share of this
sizeable, dynamic and growing market, both organically and through
acquisition where this provides a route to market for our core
capabilities. The combination of an increasing demand for our
technologies and software with significant government funding,
underpins our confidence and ambitious growth plans.
Once again, I would like to take this opportunity to thank each
and every member of the Journeo team for their flexibility,
dedication, and attention to detail during the last 12 months,
where many of them have been working from home. Nearly 30 million
people in the UK have now received at least one dose of a
coronavirus vaccine, part of the biggest inoculation programme the
country has ever launched, and we look forward to when businesses
and the associated travel; bus, coach, rail, and air, return to
pre-pandemic levels.
Mark Elliott
Chairman
Chief Executive's report
Introduction
Our strategy to develop our own technologies, IP and engineering
capabilities centred around strong customer relationships and
meeting customer and market needs started to bear fruit in 2020.
The progress we made was all the more pleasing against a backdrop
of challenging market conditions, and I am pleased to see the
growing number of sales and pipeline opportunities this year that
are based upon our own technologies, products, software, and
services. These include strategically important contract wins, such
as the GBP1.3m transport infrastructure award and the GBP1.8m fleet
operator framework, announced in January and the recently announced
GBP1.1m award which included our latest double-sided and solar
powered display systems.
A number of sectors within the public transport and rail freight
transport markets are realising the benefits of the type of
converged solutions we are developing. Over the coming years, we
will continue to invest in specific areas of research and
development to create new capabilities, as we become more deeply
integrated into the solutions that will become essential in
smarter, greener cities.
Whilst the disruption caused by the pandemic has been
experienced throughout most sectors of the transport market and has
impacted the delivery of some elements in our own projects, our
business continuity procedures ensured that we have been able to
operate throughout the year, with minimal recourse to the
Government furlough scheme.
Operational Review
Passenger Infrastructure Systems
The significant potential for growth I referenced in my report
last year is beginning to be delivered. The sales process for large
infrastructure projects can be long and difficult to predict, and
the substantial orders secured at the start of 2020 were the result
of sustained pre-sales work by our team over many months. I am
delighted that despite the challenges, the sales pipeline has
continued to build; delivering a 43% increase in sales revenues for
the full year to GBP6.8m (2019: GBP4.8m).
The UK Government issued a number of commitments to develop
urban centres through stimulus packages such as the GBP2.4bn
Transforming Cities Fund (TCF), and these are continuing. As the
country moves on from the restrictions of the past 12 months, the
consensus view suggests that this important market driver for
further regeneration will continue, or possibly accelerate. This is
bolstered following the GBP3bn National Bus Strategy for England,
announced on 15 March 2021.
Our sales and marketing teams have been successful in accessing
the opportunities that TCF has presented and the GBP1.9m award from
a northern transport partnership, announced in February of last
year to deliver our powerful EPIX Content Management System (CMS)
and associated display hardware, evidence this. The first phase of
the project roll-out was delivered on time and on budget, and our
high quality solutions have been well received by the customer, to
such extent that we secured subsequent purchase orders totalling
GBP1.3m in January of this year.
In January 2020, we announced the receipt of a GBP0.8m purchase
order from City of Edinburgh Council for the delivery of critical
transport infrastructure at Edinburgh Bus Station, which is part of
a five year, GBP4.8m contract. While local lockdown restrictions
have understandably delayed some elements of commissioning, the
first phase is nearing completion and will soon be at the centre of
an impressive real-time information estate that will serve
residents and visitors alike, promoting the use of public transport
within the capital of Scotland. We are proud to be working with
this world class capital city as they elevate the capabilities of
their transport infrastructure and are confident that our
innovative technology will lead to further orders. Once the works
are completed, the system will become a showcase for our
capabilities on a global stage, for many years to come.
Our relationship with Transport for West Midlands (TfWM) is
developing and in July we announced GBP0.6m orders had been
received under the Enhanced Infrastructure Framework Agreement.
Predominantly for in-shelter information technology, it included
the provision of CCTV security solutions which connect into their
control centre. We are also supplying a number of our second
generation pollution detection sensors, which monitor and report in
real time on the air quality along the regions key transport
corridors.
Major transport infrastructure projects are becoming the
cornerstone for our success with local authority and passenger
transport executive customers. We have a growing pipeline of sales
opportunities that will further embed the Group within transport
and associated highways infrastructure systems.
Whilst the transport community has and continues to face many
challenges, we have ensured that we have been ready and able to
support our customers throughout the pandemic, responding to their
changing needs as the levels of public transport requirements
fluctuated. Journeo, like many organisations, welcomes the roadmap
out of lockdown that has been presented by the Government and sees
further opportunities as members of the public return to school,
work and centres of economic benefit.
Fleet Transport Operator Systems
Our fleet business made further progress in the year, winning
new customers, retaining key asset clients, and embedding our
solutions more deeply into our customers' operations.
Revenue remained relatively stable at GBP6.8m (2019: GBP6.6m)
which, in light of the operating conditions our customers were
facing, is a satisfying result.
With fewer people using public transport, vehicle refresh
programmes were largely suspended, further eroding the already
suppressed numbers of new bus registrations and the sales that we
benefit from alongside them. However, the wider consequences of
fewer new vehicle registrations were offset by our ability to offer
secure remote working and uplifting the capability of operators'
legacy systems
Much of this resilience can be attributed to the growing
adoption of our secure, cloud-based technologies. Whilst the
pandemic resulted in fleet operators suspending large, fleet-wide
technology roll outs, our agnostic and open approach enabled us to
stay on track financially whilst growing our user base, and by
delivering real and meaningful benefits to our customers.
This approach was rewarded in August with a three-year renewal
of the framework agreement with Abellio. Operating services in and
around the London area, this multi-modal transport operator is
currently evaluating a number of Journeo connected bus technologies
and has already purchased a 200-vehicle installation of our Journeo
Edge IoT gateway. The agile and agnostic nature of our solution has
the capabilities for wider multi-modal deployment on rail, tram and
coach as well as bus operations.
Our ground breaking airport passenger and flight crew transfer
solutions continue to attract attention and we are in discussions
with a number of other UK and European airports looking to deploy
similar solutions based on our software and technologies.
Deliveries of our systems at Stansted Airport were slightly
delayed, due to lock-down restrictions, and the airport is planning
its return to full service with projections of operating at Peak
Vehicle Requirement (PVR), in Q3 and Q4 of 2021. We are
coordinating our airport systems marketing campaign so that
potential customers can contact and visit Stansted Airport to see
our latest solution in action.
We have, for many years, maintained a small and agile rail team
and our enhanced capabilities, via our own IP, to address the
safety, security and operational efficiencies of multi-modal
customers has seen our activities with rail operating companies
throughout the year grow. In addition to this, there has been
direct work with Network Rail, trialling advanced video analytics
to maintain critical rail infrastructure.
Central Services
As previously highlighted, the Group has operated continually
throughout the pandemic, with careful attention given to supporting
our people, many of whom were working from home. During this time,
our central services teams have maintained relationships throughout
our supply chains to secure raw materials and maintain stock levels
whilst preserving our cash reserves and reducing expenditure where
possible.
One such area where we suspended non-essential spending was a
project to unify the branding of our operating companies. Despite
the benefits that a more intuitive and informative website would
bring to future sales, we decided that the Group would be better
served by delaying the investment in this project. The project
recommenced in January this year and will be materially completed
during H1.
To support the increased on-line presence, we have also begun to
invest in additional sales and marketing resources as we acquire
more customers and increase market share, whilst at the same time,
extend our reach into new or related markets.
Russ Singleton
Chief Executive
Consolidated statement of comprehensive income
for the year ended 31 December 2020
2020 2019
Notes GBP'000 GBP'000
------------------------------------------------------- ----- -------- --------
Revenue 2,3 13,605 11,402
Cost of sales (8,304) (6,863)
------------------------------------------------------- ----- -------- --------
Gross profit 3 5,301 4,539
Underlying administrative expenses (5,142) (5,530)
Other income 305 214
------------------------------------------------------- ----- -------- --------
Underlying profit / (loss) 464 (777)
Share-based payments (116) -
------------------------------------------------------- ----- -------- --------
Total administrative expenses and other income (4,953) (5,316)
------------------------------------------------------- ----- -------- --------
Operating profit / (loss) 348 (777)
Finance expense (155) (171)
------------------------------------------------------- ----- -------- --------
Profit / (loss) before taxation from continuing
operations 193 (948)
Taxation credit 4 2 15
------------------------------------------------------- ----- -------- --------
Profit / (loss) for the year being total comprehensive
profit / (loss) attributable to owners of the
parent 195 (933)
------------------------------------------------------- ----- -------- --------
Profit / (loss) per share 5
Basic 2.27p (1.08p)
------------------------------------------------------- ----- -------- --------
Diluted 2.26p (1.08p)
------------------------------------------------------- ----- -------- --------
Consolidated statement of changes in equity
for the year ended 31 December 2020
Share Total equity
Share premium Retained shareholders'
capital account earnings funds
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------- -------- --------- --------------
Balance at 1 January 2019 6,061 8 (6,058) 11
Loss and total comprehensive income for
the year - - (933) (933)
Proceeds from issue of new shares 156 950 - 1,106
------------------------------------------ -------- -------- --------- --------------
Balance at 31 December 2019 6,217 958 (6,991) 184
------------------------------------------ -------- -------- --------- --------------
Profit and total comprehensive income for
the year - - 195 195
Proceeds from issue of new shares 33 216 - 249
------------------------------------------ -------- -------- --------- --------------
Share-based payments - - 116 116
------------------------------------------ -------- -------- --------- --------------
Balance at 31 December 2020 6,250 1,174 (6,680) 744
------------------------------------------ -------- -------- --------- --------------
Consolidated statement of financial position
at 31 December 2020
2020 2019
Notes GBP'000 GBP'000
------------------------------ ----- -------- --------
Assets
Non-current assets
Goodwill 6 1,345 1,345
Other intangible assets 1,144 1,054
Property, plant and equipment 619 287
Trade and other receivables 43 43
------------------------------ ----- -------- --------
3,151 2,729
------------------------------ ----- -------- --------
Current assets
Inventories 1,675 1,271
Trade and other receivables 4,207 3,923
Cash and cash equivalents 1,254 725
------------------------------ ----- -------- --------
7,136 5,919
------------------------------ ----- -------- --------
Total assets 10,287 8,648
------------------------------ ----- -------- --------
Equity and Liabilities
Shareholders' equity
Share capital 6,250 6,217
Share premium account 1,174 958
Retained earnings (6,680) (6,991)
------------------------------ ----- -------- --------
Total equity 744 184
------------------------------ ----- -------- --------
Non-current liabilities
Deferred revenue 957 671
Other payables 80 -
Loans and borrowings 564 570
Deferred tax liability - 9
Lease liabilities 358 64
Provisions 278 315
------------------------------ ----- -------- --------
2,237 1,629
------------------------------ ----- -------- --------
Current liabilities
Trade and other payables 3,332 3,212
Deferred revenue 3,061 2,214
Loans and borrowings 595 1,141
Lease liabilities 135 88
Provisions 183 180
------------------------------ ----- -------- --------
7,306 6,835
------------------------------ ----- -------- --------
Total equity and liabilities 10,287 8,648
------------------------------ ----- -------- --------
Consolidated statement of cash flows
for the year ended 31 December 2020
2020 2019
Notes GBP'000 GBP'000
----------------------------------------------- ----- -------- --------
Net cash flows from operating activities 7 1,574 (249)
----------------------------------------------- ----- -------- --------
Cash flows from investing activities
Purchases of property, plant and equipment (55) (45)
Purchases / generation of intangible assets (519) (538)
----------------------------------------------- ----- -------- --------
Net cash flows from investing activities (574) (583)
----------------------------------------------- ----- -------- --------
Cash flows from financing activities
Cash flows from financing activities (546) 145
Principal element of lease repayments (168) (170)
Repayment of loans (6) (10)
Issue of Shares 249 1,106
----------------------------------------------- ----- -------- --------
Net cash flows from financing activities (471) 1,071
----------------------------------------------- ----- -------- --------
Net increase in cash and cash equivalents 529 239
Cash and cash equivalents at beginning of year 724 485
Effect of foreign exchange rate changes 1 1
----------------------------------------------- ----- -------- --------
Cash and cash equivalents at end of year 1,254 725
----------------------------------------------- ----- -------- --------
The accompanying notes form an integral part of these condensed
consolidated financial statements.
Notes to the consolidated financial statements
for the year ended 31 December 2020
1. Basis of preparation
The Group financial statements are prepared in accordance with
International Financial Reporting Standards and IFRIC
interpretations issued and effective (or adopted early) and
endorsed by the European Union at the time of preparing these
financial statements and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The financial
statements have been prepared under the historical cost convention,
except financial instruments and share-based payments, which are
prepared in accordance with IFRS 9 and IFRS 2 respectively. A
summary of the more important Group accounting policies is set out
below.
The individual financial statements of each Group entity are
presented in the currency of the primary economic environment in
which the entity operates (its functional currency). For the
purpose of the consolidated financial statements, the results and
financial position of each Group entity are expressed in Sterling
(GBP), which is the presentation currency for the consolidated
financial statements. The numbers in the financial statements are
rounded in GBP'000 for presentation purposes.
Going concern
The Group's business activities, together with factors likely to
affect its future development, performance and position, are set
out in the Strategic Report along with the principal risks and
uncertainties.
The Group's net underlying profit for the year was GBP464k
(2019: GBP777k loss). As at 31 December 2020 the Group had net
current liabilities of GBP170k (2019: GBP916k) and net cash
reserves of GBP1,254k (2019: GBP725k).
In December 2020, the 2016 Loan Notes maturity date was extended
to 31 March 2022.
The Group raised gross proceeds of GBP1.2m from a placing in
December 2019 and GBP0.25m from a placing in April 2020.
The Directors have prepared Group cash flow projections for the
period to 30 June 2022 based on latest forecasts that show that the
Group will be able to operate within the Group current funding
resources with significant headroom.
As with all businesses there are particular times of the year
where our working capital requirements are at their peak. The Group
is well placed to manage these business risks effectively and the
Board reviews the Group's performance against budgets and forecasts
on a regular basis to ensure action is taken where needed. The
Directors also monitor a rolling cash flow forecast, and key
management review working capital movements and requirements on a
daily basis.
The projections, taking account of reasonably possible changes
in trading performance, indicate that the Group will operate within
available facilities throughout the projection period and
therefore, based on these projections, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future and
for at least twelve months from the date of these financial
statements. The directors therefore continue to adopt the going
concern basis in preparing the financial statements.
2. Revenue
The revenue split between goods and services is:
2020 2019
GBP'000 GBP'000
--------------------------------- -------- --------
Goods 9,417 6,996
Services 4,188 4,406
--------------------------------- -------- --------
13,605 11,402
--------------------------------- -------- --------
Contract works included in goods 5,332 3,218
--------------------------------- -------- --------
The other income is split as follows:
2020 2019
GBP'000 GBP'000
---------------- -------- --------
R&D Tax credit 267 214
Furlough Income 38 -
---------------- -------- --------
305 214
---------------- -------- --------
3. Segmental reporting
IFRS 8 requires operating segments to be determined on the basis
of those segments whose operating results are regularly reviewed by
the Board of Directors (the Chief Operating Decision Maker as
defined by IFRS 8) to make strategic decisions.
As the Board of Directors reviews revenue, gross profit and
operating loss on the same basis as set out in the consolidated
statement of comprehensive income, no further reconciliation is
considered to be necessary.
Revenue and gross profit
Revenue Gross profit Revenue Gross profit
2020 2020 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------- ------------ -------- ------------
Fleet Systems 6,827 2,147 6,646 1,900
Passenger Systems 6,778 3,154 4,756 2,639
------------------ -------- ------------ -------- ------------
Total 13,605 5,301 11,402 4,539
------------------ -------- ------------ -------- ------------
Major customers
In the year, one customer within the Passenger Systems segment
accounted for over 10% of Group revenue at 10%. In the prior year,
there were two Fleet Systems customers that each accounted for over
10% of revenue at 16% and 10% and no major customers within the
Passenger Systems segment.
Underlying profit / (loss)
2020 2019
GBP'000 GBP'000
--------------------------- -------- --------
Fleet Systems 81 (469)
Passenger Systems 634 (80)
--------------------------- -------- --------
715 (549)
Central (251) (228)
--------------------------- -------- --------
Underlying profit / (loss) 464 (777)
--------------------------- -------- --------
Reconciling to profit / (loss) before interest and tax
Profit/(loss)
Underlying before
operating Share-based Operating interest
profit/(loss) payments profit/(loss) and tax
2020 GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------------- ----------- -------------- -------------
Fleet Systems 81 (58) 23 23
Passenger Systems 634 (58) 576 576
------------------ -------------- ----------- -------------- -------------
715 (116) 599 599
Central (251) - (251) (251)
------------------ -------------- ----------- -------------- -------------
464 (116) 348 348
------------------ -------------- ----------- -------------- -------------
Profit/(loss)
Underlying before
operating Share-based Operating interest
profit/(loss) payments profit/(loss) and tax
2019 GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------------- ----------- -------------- -------------
Fleet Systems (469) - (469) (469)
Passenger Systems (80) - (80) (80)
------------------ -------------- ----------- -------------- -------------
(549) - (549) (549)
Central (228) - (228) (228)
------------------ -------------- ----------- -------------- -------------
(777) - (777) (777)
------------------ -------------- ----------- -------------- -------------
Net assets attributed to each business segment represent the net
external operating assets of that segment, excluding goodwill, bank
balances and borrowings, which are shown as unallocated amounts,
together with central assets and liabilities.
Net assets
Assets Liabilities Net assets Assets Liabilities Net assets
2020 2020 2020 2019 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- ----------- ---------- -------- ----------- ----------
Fleet Systems 3,599 (2,932) 667 3,501 (2,700) 801
Passenger Systems 4,077 (5,372) (1,295) 3,059 (3,968) (909)
-------------------- -------- ----------- ---------- -------- ----------- ----------
7,676 (8,304) (628) 6,560 (6,668) (108)
Goodwill 1,345 - 1,345 1,345 - 1,345
Cash and borrowings 1,254 (1,159) 95 725 (1,711) (986)
Unallocated 12 (80) (68) 18 (85) (67)
-------------------- -------- ----------- ---------- -------- ----------- ----------
Total 10,287 (9,543) 744 8,648 (8,464) 184
-------------------- -------- ----------- ---------- -------- ----------- ----------
Geographical segments
Revenue Gross profit Revenue Gross profit
2020 2020 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- ------------ -------- ------------
UK 13,025 4,923 10,522 4,025
-------------------- -------- ------------ -------- ------------
International
- Scandinavia 520 515
- Other EU 52 355
- Non-EU 8 10
-------------------- -------- ------------ -------- ------------
Total international 580 378 880 514
-------------------- -------- ------------ -------- ------------
Total 13,605 5,301 11,402 4,539
-------------------- -------- ------------ -------- ------------
Assets and liabilities by location
2020 2019
GBP'000 GBP'000
------------------ -------- --------
Assets
UK 10,265 8,628
International 22 20
------------------ -------- --------
Total assets 10,287 8,648
------------------ -------- --------
Liabilities
UK (9,533) (8,436)
International (10) (28)
------------------ -------- --------
Total liabilities (9,543) (8,464)
------------------ -------- --------
All non-current assets are located within the United
Kingdom.
4. Taxation
(a) Analysis of credit in year:
2020 2019
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Current tax
UK corporation tax on the loss for the year (19%) - -
Swedish corporation tax on the profit for the year (22%) - -
Prior year under provision 7 10
Deferred tax credit
- Temporary differences on acquisition (9) (25)
--------------------------------------------------------- -------- --------
Total tax credit for the year (2) (15)
--------------------------------------------------------- -------- --------
(b) Factors affecting the total tax (credit) / charge for the
year
The tax assessed for the year differs from the standard rate of
corporation tax in the UK at 19% (2019: 19%). The differences are
explained below:
2020 2019
GBP'000 GBP'000
-------------------------------------------------------------- -------- --------
Profit / (loss) on ordinary activities before tax 193 (948)
-------------------------------------------------------------- -------- --------
Profit / (loss) on ordinary activities multiplied by standard
rate of
corporation tax in the UK of 19% (2019: 19%) 37 (180)
Effects of:
Expenses not deductible for tax purposes (4) (8)
Change in unrecognised deferred tax assets 15 204
Income not taxable (57) (41)
Prior year under provision 7 10
-------------------------------------------------------------- -------- --------
Total tax credit for the year (2) (15)
-------------------------------------------------------------- -------- --------
(c) Deferred tax asset / (liability)
The unrecognised and recognised deferred tax assets/(liability)
comprise the following:
Unrecognised Recognised
------------------------------- ------------------ ------------------
2020 2019 2020 2019
Group GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- -------- --------
Tax losses 841 669 - -
Decelerated capital allowances (47) 51 - -
Arising on acquisition - - - (9)
------------------------------- -------- -------- -------- --------
794 720 - (9)
------------------------------- -------- -------- -------- --------
The Group has GBP4,425,000 of unutilised tax losses (2019:
GBP3,937,000) which may be carried forward indefinitely. On 3 March
2021, the Chancellor of the Exchequer announced that the
corporation tax rate would increase to a maximum of 25% from 1
April 2023.
5. Profit / (loss) per Ordinary Share
Basic earnings per share (EPS) is calculated by dividing the
earnings attributable to Ordinary Shareholders by the weighted
average number of Ordinary Shares in issue during the year.
For diluted earnings, the weighted average number of Ordinary
Shares in issue is adjusted to assume conversion of all dilutive
potential Ordinary Shares.
2020 2019
----------------------------------------- -------------------- --------------------
Profit Per share Profit Per share
/ (loss) amount / (loss) amount
Group GBP'000 Pence GBP'000 Pence
----------------------------------------- --------- --------- --------- ---------
Basic EPS
Profit / (loss) attributable to Ordinary
Shareholders 195 2.27 (933) (1.08)
----------------------------------------- --------- --------- --------- ---------
Diluted EPS
Profit / (loss) attributable to Ordinary
Shareholders 195 2.26 (933) (1.08)
----------------------------------------- --------- --------- --------- ---------
Details of the weighted average number of Ordinary Shares used
as the denominator in calculating the earnings per Ordinary Share
are given below:
2020 2019
'000 '000
------------------------------------------ ----- ------
Basic weighted average number of shares 8,610 86,433
Dilutive potential Ordinary Shares 29 -
------------------------------------------ ----- ------
Diluted weighted average number of shares 8,639 86,433
------------------------------------------ ----- ------
6. Goodwill
Goodwill acquired in a business combination is allocated at
acquisition to the cash generating unit (CGU) that is expected to
benefit from that business combination. The Group has two CGUs
which are its two operating segments, Fleet Systems and Passenger
Systems. The carrying amount of goodwill has been allocated to the
CGUs as follows:
Passenger
Systems Total
GBP'000 GBP'000
-------------------- --------- --------
Deemed cost:
At 1 January 2019 1,345 1,345
-------------------- --------- --------
At 31 December 2019 1,345 1,345
-------------------- --------- --------
At 31 December 2020 1,345 1,345
-------------------- --------- --------
The Group tests goodwill annually for impairment as at 31
December, or more frequently if there are indications that goodwill
might be impaired.
The recoverable amounts of the CGUs are determined based on a
value-in-use calculation which uses cash flow projections based on
financial budgets and business plans approved by the Directors
covering a five-year period. Cash flows beyond that period have
been extrapolated in perpetuity assuming no growth, which the
Directors consider to be a conservative approach.
The key assumptions for the value-in-use calculations are those
regarding discount rates and sales forecasts.
The discount rates needed to equate the net present value from
these cash flows to the carrying value of goodwill are compared to
the required rate of return from the CGU based upon an assessment
of the time value of money, prevailing interest rates and the risks
specific to the CGU. If this discount rate is in excess of the
required rate of return then it is assumed that no impairment has
occurred to the carrying value of goodwill.
The discount rates are as follows:
2020 2019
% %
------------------ ---- ----
Passenger Systems 13 13
------------------ ---- ----
The discount rates used are based on the Board's judgement
considering macroeconomic factors and reflecting specific risks in
each segment such as the nature of the market served, the
concentration of customers, cost profiles and barriers to
entry.
Passenger Systems also has intangible assets, which are
considered in the same value-in-use calculations as goodwill.
The Passenger Systems cash flow projections used to determine
value in use are based upon assumptions of sales, margins and cost
bases. Of these assumptions the value in use is most sensitive to
the level of sales. Margins are fixed in the forecast based upon
past experience; the cost base is similarly based upon past
experience and will vary depending upon the level of sales. In
accordance with the requirements of IAS 36 our value-in-use
calculations do not include cash flows from restructurings to which
the Group is not yet committed.
The level of sales is the key assumption used in the cash flow
forecast. Sales have been determined by management using estimates
based upon past experience and future performance with reference to
market position and the sales pipeline. The macroeconomic
environment has improved and there has been an increase in the
number and size of contracts available. In 2017 a major
restructuring took place, followed by a reinvestment in key staff
during 2018 and 2019. The 2021 forecast predicts growth of 19%. The
remaining four years are based upon compound sales growth of
5%.
The value-in-use calculation supports the carrying value of the
CGU with headroom of GBP8,114k. A sensitivity analysis has been
performed on the impairment test. The Directors consider that an
absolute change in the key sales assumption is possible and a
reduction in the growth rate in 2021 to 5% would result in headroom
remaining in the current carrying value of goodwill in relation to
Passenger Systems of GBP4,974k. If sales forecasts were down 20%
across the whole period and overheads remained unchanged then there
would be headroom of GBP2,776k.
Based on the review the discount rate applied to equate the net
present value of the forecast cash flows to the carrying value of
goodwill and the intangible assets was 84.1%, whereas the required
rate of return of the CGU is 13%.
In view of this, the Directors consider that no impairment of
goodwill or intangible assets is required.
7. Reconciliation of operating (loss) / profit to net cash
outflow from operating activities
2020 2019
GBP'000 GBP'000
-------------------------------------------------------- -------- --------
Profit / (loss) for the year 195 (933)
Adjustments for:
- Finance expense 155 171
- Deferred tax credit (9) (25)
- Depreciation of property, plant and equipment 209 198
- Amortisation of intangible fixed assets 429 453
- Share-based payment expense 116 -
- Foreign exchange rate 17 12
- (Decrease) / increase in provisions (34) 5
-------------------------------------------------------- -------- --------
Operating cash flows before movement in working capital 1,078 (119)
(Increase) / decrease in inventories (404) 379
Increase in receivables (280) (523)
Increase in payables 1,317 183
-------------------------------------------------------- -------- --------
Cash inflow / (outflow) from operations 1,711 (80)
Income taxes paid (7) (10)
Interest paid (130) (159)
-------------------------------------------------------- -------- --------
Net cash inflow / (outflow) from operating activities 1,574 (249)
-------------------------------------------------------- -------- --------
8. Availability of audited accounts:
Copies of the 2020 audited accounts will be made available
following the announcement of the date of our AGM. They will also
be available on the Group's website (www.journeo.com) for the
purposes of AIM Rule 26 and will be posted to shareholders in due
course.
- Ends -
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END
FR FLFLAVAISFIL
(END) Dow Jones Newswires
March 25, 2021 03:00 ET (07:00 GMT)
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