TIDMPEB

RNS Number : 0382L

Pebble Beach Systems Group PLC

08 September 2021

Pebble Beach Systems Group plc

Results for the half-year ended 30 June 2021

Pebble Beach Systems Group plc (the "Group", "Company" or "Pebble"), a leading global software business specialising in playout automation and content management solutions for the broadcast and streaming service markets, is pleased to announce its unaudited half-year results for the six months ended 30 June 2021 .

Financial highlights

   --      Orders received up 64% to GBP6.4m (H1 20: GBP3.9m). 

-- Revenue up 9% to GBP4.9m (H1 20: GBP4.5m), recurring revenue up 10% to GBP2.05m (H1 20: GBP1.86m).

-- Adjusted EBITDA(1) up 14% to GBP1.7m (H1 20: GBP1.5m), representing 35% of revenue (H1 20: 34%).

   --      Profit before tax up 36% to GBP1.0m (H1 20: GBP0.7m). 
   --      Adjusted earnings per share up 33% to 0.8p (H1 20: 0.6p). 
   --      Net cash from operating activities up 32% to GBP1.8m (H1 20: GBP1.4m). 
   --      Net debt(2) down GBP1.1m in last six months to GBP6.6m at 30 June 2021. 

Operational highlights

-- The delays in customers order placement that were experienced in H2 2020 have eased significantly in the period.

   --      The capabilities of our Pebble Control application have been further enhanced. 
   --      Development of our Oceans platform continues to plan. 

-- Strategic move to a fully remote operating model delivering operational benefits in terms of resilience, organisational growth, and performance.

Current trading and outlook

-- Sustained growth in the period with a further increase in our pipeline by 7% coming on top of a 64% increase in our order intake.

   --      Well positioned to sustain performance into second half and beyond. 
   --      Considering ways in which to now further accelerate growth. 

John Varney, Non-Executive Chairman of Pebble Beach Systems Group plc, said:

" The Group has clearly delivered an excellent performance for the first half of 2021. These results and our continued investment in new software solutions coupled with our new remote operating model, has demonstrated that we are correct to have confidence in our ability to continue to grow this year and to take that momentum into 2022."

Notes

(1) Adjusted EBITDA, a non-GAAP measure, is EBITDA before non-recurring items and foreign exchange gains/losses.

(2) Net debt is the aggregation of cash and bank borrowings, excluding IFRS 16 leases

For further information please contact:

 
 
   Peter Mayhead - CEO                      +44 (0) 75 55 59 
   David Dewhurst - CFO                     36 02 
 finnCap Ltd (Nominated Adviser 
  and Broker ) 
  Marc Milmo / Teddy Whiley - Corporate      +44 (0) 207 220 
  Finance                                    0500 
 Tim Redfern / Sunila de Silva 
  - ECM 
 

The Company is quoted on the LSE AIM market (PEB.L). More information can be found at www.pebbleplc.com .

About Pebble Beach Systems

Pebble Beach Systems (trading as Pebble) is a world leader in designing and delivering automation, integrated channel and virtualised playout solutions, with scalable products designed for applications of all sizes. Founded in 2000, Pebble has commissioned systems in more than 70 countries, with proven installations ranging from single up to over 150 channels in operation, and around 2000 channels currently on air under the control of our automation technology. An innovative, agile company, Pebble is focused on discovering its customers' requirements and pain points, designing solutions which will address these elegantly and efficiently, and delivering and supporting these professionally and in accordance with its users' needs.

Forward-looking statements

Certain statements in this announcement are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast.

CHAIRMAN'S STATEMENT

Introduction

I am pleased to report that the Group has continued its robust response to the challenges presented by COVID-19 and has now fully embraced remote working as its primary means of operation. The order intake increased 64% from the comparative period of 2020, benefitting from two large orders totalling GBP1.5 million, deferred because of COVID-19 into 2021, confirming our prior confidence that COVID-19 had merely delayed a number of projects in the pipeline.

We delivered revenue up 9% on the comparative period of 2020, when the pandemic was just starting to impact, so it is encouraging to see business recover and flourish. Recurring revenue from our service contracts was up 10% and this remains an important element of our growth plans.

We continue to see an increasing opportunity for our software and are accelerating our investment in cloud and IP-based technology which will facilitate the delivery of our software solutions on new commercial offerings or a subscription basis that some customers are keen to explore. The investment in our new digital platform, Oceans, also combines the benefits of current technologies enabling our customers to establish all-IP workflows and continuing to benefit from their existing investments. We firmly believe that increasing the rate of investment in our new technology is critical to meet the market demand for all-IP and cloud-based solutions.

Financial performance

   --      Orders received up 64% to GBP6.4m (H1 20: GBP3.9m) 

o Includes GBP1.5m delayed from 2020 but still up 26% allowing for these COVID-19 related delayed contracts.

-- Revenue up 9% to GBP4.9m (H1 20: GBP4.5m), recurring revenue up 10% to GBP2.05m (H1 20: GBP1.86m).

-- Adjusted EBITDA1 up 14% to GBP1.7m (H1 20: GBP1.5m), representing 35% of revenue (H1 20: 34%).

   --      Net cash from operating activities up 32% to GBP1.8m (H1 20: GBP1.4m); 

o Funded increased investment in capitalised R&D of GBP0.7m (H1 20: GBP0.6m).

Operational performance

   --      Four significant new project wins in the period 

o GBP1.2m project underway in partnership with Qvest, a leading Systems Integrator, to fully upgrade ORF's existing playout capability with all-IP and UHD capability retaining Pebble as the automation provider.

o Two significant projects totalling GBP1.5m were won in the period to enable new customers in Europe and the Far East to migrate from legacy solutions historically supplied by competitors Imagine and Grass Valley.

o A key project was won and delivered in the period for an existing customer, TV2 Denmark, to enable them to broadcast the recent European football tournament on their "TV2 Play" online platform.

   --      Ongoing software development 

o The capabilities of Pebble Control have been further enhanced with the release of the VideoIPath integration allowing control of Software Defined Networks through Sony's Nevion orchestration product.

o Five positions filled in the period as we move to expand our software development capability to meet both long term roadmap and immediate customer requirements.

o Two new R&D projects have been launched to develop our next generation Media Processing and Automation Engines native to the Oceans platform. These applications will sit alongside Pebble Control and our upcoming Pebble Orchestration engine thus enabling us to fulfil the technical element of our strategy to offer customers the full flexibility only achievable with the Oceans platform offering IP native next generation media management, automation, and control.

   --      Remote operating model 

o The move to remote working has significantly curtailed the ongoing impact of COVID-19 on our operations and the sizeable increase in order intake demonstrates that we are able to do business; however, there is no doubt that our selling and delivery efforts continue to experience some delays as the result of international travel restrictions.

o We have further enhanced our commitment to a fully remote operating model with the recent vacation of one of our two Weybridge office units and the commencement of the process to hire a Head of Remote to work with the management over the next twelve months to support our transformation to a world class fully remote organisation.

   --      Inventory build 

o The worldwide shortage of semiconductors is having some impact on project delivery timescales for those projects where customers have asked us to supply configured hardware. We have mitigated the impact by temporarily increasing our hardware inventory.

Cash flows and net debt

The Group held cash and cash equivalents of GBP1.4 million at 30 June 2021 (H1 2020: GBP1.4 million). The table below summarises the cash flows for the half year.

 
                                                     2021          2020 
                                              GBP'million   GBP'million 
-------------------------------------------  ------------  ------------ 
 
 Cash generated from operating activities             1.8           1.4 
 Net cash used in investing activities              (0.7)         (0.7) 
 Net cash used in financing activities              (0.5)         (0.4) 
 Net increase in cash and cash equivalents            0.6           0.3 
 Cash and cash equivalents at 1 January               0.8           1.1 
-------------------------------------------  ------------  ------------ 
 Cash and cash equivalents at 30 June                 1.4           1.4 
-------------------------------------------  ------------  ------------ 
 

As at 30 June 2021 net debt(2) , excluding the impact of IFRS16, was GBP6.6 million (cash GBP1.4 million and bank debt of GBP8.0 million). The Group was using all GBP8.0 million of its available facilities at 30 June 2021, having re-paid GBP0.5 million in the period.

Going concern

The Directors, having made suitable enquiries and analysis of the accounts, consider that the Group has adequate resources to continue in business for the foreseeable future. In making this assessment, which covers a minimum period of twelve months from approval of this half-year report, the Directors have considered the Group's trading forecast, cash flow forecasts, available headroom and projected financial covenants on the banking facility, and levels of recurring support revenue. (See Note 3 below).

Board

On 4 May 2021, Chris Errington, a partner at our largest shareholder Kestrel Partners LLP, was appointed to the Board as a non-executive director.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group remain consistent with the Principal Risks and Uncertainties reported in the Group's 31 December 2020 Annual Report. Since the 2020 Annual Report, the impact of the COVID-19 pandemic on the business continues to be monitored by the Board.

Current trading and outlook

Globally, all sectors are still impacted by the ongoing effects of COVID-19, but our results for the first half show those effects are lessening, despite some customers still displaying a cautionary approach to their investment decisions.

Our pipeline remains strong with good growth evident during H1 which has continued into the second half. Our results for the first half of the year and our continued investment in new software solutions coupled with our new remote operating model, has demonstrated that we are correct to have confidence in our ability to continue to grow this year and to take that momentum into 2022.

John Varney

Non-Executive Chairman

CONSOLIDATED INCOME STATEMENT

for the half year ended 30 June 2021

 
                                                           6 months      6 months     Year ended 
                                                         to 30 June    to 30 June    31 December 
                                                               2021          2020           2020 
                                                        (Unaudited)   (Unaudited)      (Audited) 
                                                Notes       GBP'000       GBP'000        GBP'000 
 
 Revenue                                          4           4,889         4,486          8,393 
 Cost of sales                                              (1,025)       (1,116)        (1,964) 
                                                       ------------  ------------  ------------- 
 Gross profit                                                 3,864         3,370          6,429 
 Sales and marketing expenses                                 (789)         (901)        (1,687) 
 Research and development expenses                            (638)         (605)        (1,263) 
 Administrative expenses                                    (1,233)         (878)        (1,870) 
 Foreign exchange (losses)/gains                               (33)           103             15 
 Other expenses                                                   -         (156)          (156) 
 Operating profit                                 5           1,171           933          1,468 
---------------------------------------------  ------  ------------  ------------  ------------- 
 Operating profit is analysed as: 
 Adjusted EBITDA                                              1,733         1,515          2,658 
 Exchange (losses)/gains (charged)/credited 
  to the income statement                                      (33)           103             15 
---------------------------------------------  ------  ------------  ------------  ------------- 
 Earnings before interest, tax, depreciation 
  and amortisation (EBITDA)                                   1,700         1,618          2,673 
---------------------------------------------  ------  ------------  ------------  ------------- 
 Depreciation                                                 (114)         (124)          (234) 
 Amortisation and impairment of acquired 
  intangibles                                                     -         (156)          (156) 
 Amortisation of capitalised development 
  costs                                                       (415)         (405)          (815) 
 Finance costs                                                (168)         (195)          (374) 
 Finance income                                                   -             1              1 
 Profit before tax                                            1,003           739          1,095 
 Tax                                              6            (19)             6            199 
                                                       ------------  ------------  ------------- 
 Profit for the period being attributable 
  to owners of the parent                                       984           745          1,294 
 
 Earnings per share 
  attributable to the owners of 
  the parent during the period 
 Basic earnings per share                         7            0.8p          0.6p           1.0p 
 
 Diluted earnings per share 
 Diluted earnings per share                       7            0.8p          0.6p           1.0p 
---------------------------------------------  ------  ------------  ------------  ------------- 
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the half year ended 30 June 2021

 
                                           6 months      6 months     Year ended 
                                              to 30         to 30    31 December 
                                          June 2021     June 2020           2020 
                                        (Unaudited)   (Unaudited)      (Audited) 
                                            GBP'000       GBP'000        GBP'000 
 -----------------------------------   ------------  ------------  ------------- 
 
  Profit for the financial 
   year                                         984           745          1,294 
  Other comprehensive income 
   - items that may be reclassified 
   subsequently to profit 
   or loss: 
  Exchange differences on 
   translation of overseas 
   operations                                     6          (49)             26 
 
  Total profit for the period 
   attributable to owners 
   of the parent                                990           696          1,320 
 ------------------------------------  ------------  ------------  ------------- 
 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

for the half year ended 30 June 2021

 
                                                       Capital 
                            Ordinary       Share    redemption      Merger     Translation     Accumulated 
                              shares     premium       reserve     reserve         reserve          losses      Total 
                              GBP000      GBP000        GBP000      GBP000          GBP000          GBP000     GBP000 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 At 1 January 2021             3,115       6,800           617      29,778           (150)        (43,626)    (3,466) 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Share based payments: 
  value of employee 
  services                         -           -             -           -               -              13         13 
 Transactions with 
  owners                           -           -             -           -               -              13         13 
 Retained profit 
  for the period                   -           -             -           -               -             984        984 
 Exchange differences 
  on translation of 
  overseas operations              -           -             -           -               6               -          6 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Total comprehensive 
  income/expense for 
  the period                       -           -             -           -               6             984        990 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 At 30 June 2021 
  (Unaudited)                  3,115       6,800           617      29,778           (144)        (42,629)    (2,463) 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 At 1 January 2020             3,115       6,800           617      29,778           (176)        (44,976)    (4,842) 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Share based payments: 
  value of employee 
  services                         -           -             -           -               -               6          6 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Transactions with 
  owners                           -           -             -           -               -               6          6 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Retained profit 
  for the period                   -           -             -           -               -             745        745 
 Exchange differences 
  on translation of 
  overseas operations              -           -             -           -            (49)               -       (49) 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Total comprehensive 
  income/expense for 
  the period                       -           -             -           -            (49)             745        696 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 At 30 June 2020 
  (Unaudited)                  3,115       6,800           617      29,778           (225)        (44,225)    (4,140) 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 At 1 January 2020             3,115       6,800           617      29,778           (176)        (44,976)    (4,842) 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Share based payments: 
  value of employee 
  services                         -           -             -           -               -              12         12 
 Unclaimed dividends               -           -             -           -               -              44         44 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Transactions with 
  owners                           -           -             -           -               -              56         56 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Retained profit 
  for the year                     -           -             -           -               -           1,294      1,294 
 Exchange differences 
  on translation of 
  overseas operations              -           -             -           -              26               -         26 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 Total comprehensive 
  income/expense for 
  the period                       -           -             -           -              26           1,294      1,320 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 At 31 December 2020 
  (Audited)                    3,115       6,800           617      29,778           (150)        (43,626)    (3,466) 
-----------------------  -----------  ----------  ------------  ----------  --------------  --------------  --------- 
 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2021

 
                                                   30 June      30 June   31 December 
                                                      2021         2020          2020 
                                               (Unaudited)  (Unaudited)     (Audited) 
                                       Notes       GBP'000      GBP'000       GBP'000 
 Assets 
 Non-current assets 
 Intangible assets                       8           5,297        4,730         5,001 
 Property, plant and equipment                       1,114        1,151         1,208 
 
                                                     6,411        5,881         6,209 
                                              ------------  -----------  ------------ 
 Current assets 
 Inventories                                           282          188           148 
 Trade and other receivables                         3,057        3,344         3,125 
 Cash and cash equivalents                           1,444        1,395           826 
                                              ------------  -----------  ------------ 
                                                     4,783        4,927         4,099 
 Liabilities 
 Current liabilities 
 Financial liabilities - borrowings                  1,300        1,520         1,800 
 Trade and other payables                            4,521        4,437         4,059 
 Lease liabilities - current                           143          126           145 
                                              ------------  -----------  ------------ 
                                                     5,964        6,083         6,004 
                                              ------------  -----------  ------------ 
 
 Net current liabilities                           (1,181)      (1,156)       (1,905) 
                                              ------------  -----------  ------------ 
 
 Non-current liabilities 
 Financial liabilities - borrowings                  6,750        7,650         6,750 
 Lease liabilities - non-current                       943          991         1,020 
 Deferred tax liabilities                                -          224             - 
                                                     7,693        8,865         7,770 
                                              ------------  -----------  ------------ 
 
 Net liabilities                                   (2,463)      (4,140)       (3,466) 
------------------------------------  ------  ------------  -----------  ------------ 
 
 
   Equity attributable to owners of 
   the parent 
 Ordinary shares                                     3,115        3,115         3,115 
 Share premium account                               6,800        6,800         6,800 
 Capital redemption reserve                            617          617           617 
 Merger reserve                                     29,778       29,778        29,778 
 Translation reserve                                 (144)        (225)         (150) 
 Retained earnings                                (42,629)     (44,225)      (43,626) 
                                              ------------  -----------  ------------ 
 Total equity                                      (2,463)      (4,140)       (3,466) 
------------------------------------  ------  ------------  -----------  ------------ 
 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the half year ended 30 June 2021

 
 
                                                         6 months      6 months     Year ended 
                                                       to 30 June    to 30 June    31 December 
                                                             2021          2020           2020 
                                                      (Unaudited)   (Unaudited)      (Audited) 
                                              Notes       GBP'000       GBP'000        GBP'000 
 Cash flows from operating activities 
 Cash generated from operations                 9           2,030         1,603          2,484 
 Interest paid                                              (168)         (195)          (374) 
 Taxation paid                                               (19)          (16)           (46) 
                                                     ------------  ------------  ------------- 
 Net cash from operating activities                         1,843         1,392          2,064 
                                                     ------------  ------------  ------------- 
 
 Cash flows from investing activities 
 Interest received                                              -             1              1 
 Purchase of property, plant and equipment                   (21)          (63)          (107) 
 Expenditure on capitalised development 
  costs                                                     (711)         (620)        (1,301) 
 
 Net cash used in investing activities                      (732)         (682)        (1,407) 
                                                     ------------  ------------  ------------- 
 
 Cash flows from financing activities 
 Net cash used in repayment of financing 
  activities                                                (500)         (380)        (1,000) 
 Net cash used in financing activities                      (500)         (380)        (1,000) 
                                                     ------------  ------------  ------------- 
 Net increase/(decrease) in cash and 
  cash equivalents                                            611           330          (343) 
 Effect of foreign exchange rate changes                        7          (79)             25 
                                                     ------------  ------------  ------------- 
 Cash and cash equivalents and overdrafts 
  at 1 January                                                826         1,144          1,144 
 Cash and cash equivalents and overdrafts 
  at period end                                             1,444         1,395            826 
                                                     ------------  ------------  ------------- 
 
 Net debt comprises: 
 Cash and cash equivalents and overdrafts                   1,444         1,395            826 
 Borrowings                                               (8,050)       (9,170)        (8,550) 
                                                     ------------  ------------  ------------- 
 Net debt at period end                                   (6,606)       (7,775)        (7,724) 
-------------------------------------------  ------  ------------  ------------  ------------- 
 

NOTES TO THE HALF-YEAR REPORT

for the six months ended 30 June 2021

   1.        GENERAL INFORMATION 

The Pebble Beach Systems Group is a leading global software business specialising in solutions for playout automation and content, serving customers in the broadcast markets.

The Company is a public limited company and is quoted on the Alternative Investment Market (AIM) of the London Stock Exchange. The Company is incorporated and domiciled in the UK, with registered number of 04082188.. The address of its registered office is 12 Horizon Business Village, 1 Brooklands Road, Weybridge, Surrey, KT13 0TJ.

This half-year results announcement was approved by the board on 7 September 2021.

   2.        BASIS OF PREPARATION 

The financial information for the period ended 30 June 2021 set out in this half-year report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2020 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified.

The half-year financial information has been prepared using the same accounting policies and estimation techniques as will be adopted in the Group financial statements for the year ending 31 December 2021. The Group financial statements for the year ended 31 December 2020 were prepared under International Financial Reporting Standards as adopted by the European Union. These interim financial statements have been prepared on a consistent basis and format. The Group has not applied IAS 34 'Interim Financial Reporting', which is not mandatory for AIM companies, in the preparation of these interim financial statements.

   3.   GOING CONCERN 

The Directors, having made suitable enquiries and analysis of the accounts, consider that the Group has adequate resources to continue in business for the foreseeable future. In making this assessment, which covers a minimum period of twelve months from approval of this half-year report, the Directors have considered the Group's trading forecast, cash flow forecasts, available headroom and projected financial covenants on the banking facility, the levels of opportunities in the pipeline and recurring support revenue.

Pebble along with most companies has been impacted by the COVID-19 pandemic and recurring national lockdowns, however the impact on our Group has in the main been limited to the initial disruption of the early stages of the emerging challenges, including the on-going restrictions on physical movement of staff around the world. We moved to remote working and have adopted that as our primary mode of operation.

We remain cautious in respect of the ongoing impact of the COVID-19 pandemic. From our experience of the impact of the pandemic since March 2020, we are confident we are fundamentally resilient to the challenges it brings due to the Group's ability to service its customers remotely and its recurring revenue base from support contracts.

On the basis of the above considerations, the Directors have a reasonable expectation that the Group will have adequate resources to continue in business for the foreseeable future and therefore continue to adopt the going concern basis in preparing the interim financial statements .

   4.        SEGMENTAL REPORTING 

The Group's internal organisational and management structure and its system of internal financial reporting to the Board of Directors comprise of Pebble Beach Systems Limited and PLC costs. The chief operating decision-maker has been identified as the Board.

The Board reviews the Group's internal financial reporting in order to assess performance and allocate resources. Management have therefore determined that the operating segments for the Group will be based on these reports.

The Pebble Beach Systems Limited business is responsible for the sales and marketing of all Group software products and services.

The table below shows the analysis of Group external revenue and operating profit by business segment.

 
                                                          Pebble   PLC costs     Total 
                                                   Beach Systems 
                                                         GBP'000     GBP'000   GBP'000 
-----------------------------------------------  ---------------  ----------  -------- 
 6 months to 30 June 2021 (Unaudited) 
                                                 ---------------  ----------  -------- 
 Total revenue                                             4,889           -     4,889 
                                                 ---------------  ----------  -------- 
 
 Adjusted EBITDA                                           1,987       (254)     1,733 
 Depreciation                                              (114)           -     (114) 
 Amortisation of capitalised development 
  costs                                                    (415)           -     (415) 
 Exchange losses                                            (31)         (2)      (33) 
 Finance costs                                              (19)       (149)     (168) 
 Intercompany finance income/(costs)                          46        (46)         - 
 Profit/(loss) before taxation                             1,454       (451)     1,003 
 Taxation                                                   (77)          58      (19) 
 Profit/(loss) for the period being 
  attributable to owners of the parent                     1,377       (393)       984 
-----------------------------------------------  ---------------  ----------  -------- 
 6 months to 30 June 2020 (Unaudited) 
                                                 ---------------  ----------  -------- 
 Total revenue                                             4,486           -     4,486 
                                                 ---------------  ----------  -------- 
 
 Adjusted EBITDA                                           1,755       (240)     1,515 
 Depreciation                                              (124)           -     (124) 
 Amortisation and impairment of acquired 
  intangibles                                              (156)           -     (156) 
 Amortisation of capitalised development 
  costs                                                    (405)           -     (405) 
 Exchange gains                                               96           7       103 
 Finance costs                                              (24)       (171)     (195) 
 Finance income                                                1           -         1 
 Profit/(loss) before taxation                             1,143       (404)       739 
 Taxation                                                      6           -         6 
 Profit/(loss) for the period being 
  attributable to owners of the parent                     1,149       (404)       745 
-----------------------------------------------  ---------------  ----------  -------- 
 Year to 31 December 2020 (Audited) 
                                                 ---------------  ----------  -------- 
 Total revenue                                             8,393           -     8,393 
                                                 ---------------  ----------  -------- 
 
 Adjusted EBITDA                                           3,234       (576)     2,658 
 Depreciation                                              (234)           -     (234) 
 Amortisation of acquired intangibles                      (156)           -     (156) 
 Amortisation of capitalised development 
  costs                                                    (815)           -     (815) 
 Exchange (losses)/gains                                     (3)          18        15 
 Finance costs                                              (40)       (334)     (374) 
 Finance income                                                1           -         1 
 Intercompany finance income/(costs)                         217       (217)         - 
 Profit/(loss) before taxation                             2,204     (1,109)     1,095 
 Taxation                                                  (152)         351       199 
 Profit/(loss) for the year being attributable 
  to owners of the parent                                  2,052       (758)     1,294 
-----------------------------------------------  ---------------  ----------  -------- 
 

Geographic external revenue analysis

The revenue analysis in the table below is based on the geographical location of the customer of the business.

 
                       6 months      6 months     Year ended 
                     to 30 June    to 30 June    31 December 
                           2021          2020           2020 
                    (Unaudited)   (Unaudited)      (Audited) 
 
                          Total         Total          Total 
                        GBP'000       GBP'000        GBP'000 
----------------  -------------  ------------  ------------- 
 By market 
 UK & Europe              3,002         2,532          4,855 
 North America              327           276            842 
 Latin America              156           339            333 
 Middle East                776         1,118          2,114 
 Asia / Pacific             628           221            249 
                          4,889         4,486          8,393 
----------------  -------------  ------------  ------------- 
 

Net assets

The table below summarises the net assets of the Group by division. Balance sheet reporting is disclosed by the divisional assets and liabilities of the Group as this is consistent with the presentation of internal information provided to the Executive Management Board and the Board of Directors.

 
                            6 months     6 months     Year ended 
                          to 30 June        to 30    31 December 
                                2021    June 2020           2019 
                               Total        Total          Total 
                         (Unaudited)  (Unaudited)      (Audited) 
                             GBP'000      GBP'000        GBP'000 
----------------------  ------------  -----------  ------------- 
 By division: 
 Pebble Beach Systems          5,410        5,404          5,018 
 PLC costs                   (7,873)      (9,544)        (8,484) 
                             (2,463)      (4,140)        (3,466) 
----------------------  ------------  -----------  ------------- 
 
   5.        OPERATING PROFIT 

The following items have been included in arriving at the operating profit for the business:

 
                                                                 6 months     6 months     Year ended 
                                                               to 30 June        to 30    31 December 
                                                                     2021    June 2020           2020 
                                                                    Total        Total          Total 
                                                              (Unaudited)  (Unaudited)      (Audited) 
                                                                  GBP'000      GBP'000        GBP'000 
-----------------------------------------------------------  ------------  -----------  ------------- 
 Depreciation of property, plant and equipment                        114          124            234 
 Amortisation of acquired intangibles                                   -          156            156 
 Exchange losses/(gains) charged/(credited) 
  to profit and loss                                                   33        (103)           (15) 
 Research and development expenditure in 
  the year which includes:                                            638          605          1,263 
 
        *    Amortisation of capitalised development costs            415          405            815 
-----------------------------------------------------------  ------------  -----------  ------------- 
 
   6.        INCOME TAX EXPENSE 
 
                                             6 months     6 months     Year ended 
                                           to 30 June        to 30    31 December 
                                                 2021    June 2020           2020 
                                                Total        Total          Total 
                                          (Unaudited)  (Unaudited)      (Audited) 
                                              GBP'000      GBP'000        GBP'000 
---------------------------------------  ------------  -----------  ------------- 
 Current tax 
 UK corporation tax                                 -            -              - 
 Foreign Tax - current year                        19           16             35 
 Adjustments in respect of prior years              -            -             11 
---------------------------------------  ------------  -----------  ------------- 
 Total current tax                                 19           16             46 
---------------------------------------  ------------  -----------  ------------- 
 
 Deferred tax 
 UK corporation tax                                 -         (22)          (276) 
 Foreign Tax - current year                         -            -             26 
 Adjustments in respect of prior years              -            -              5 
 Total deferred tax                                 -         (22)          (245) 
---------------------------------------  ------------  -----------  ------------- 
 
 Total taxation                                    19          (6)          (199) 
---------------------------------------  ------------  -----------  ------------- 
 

In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase from 19 per cent to 25 per cent. Deferred taxes at the balance sheet date have been measured using current rate of 19 per cent and this is reflected in these financial statements. It is likely that the overall effect had a rate of 25 per cent been used, would be no change to the tax charge for the period nor to the deferred tax liability.

   7.        EARNINGS PER ORDINARY SHARE 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The dilutive shares are those share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year. The average market value of the Company's shares for the purpose of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

 
                                          6 months to 30 June 2021 (Unaudited) 
 
                                                           Weighted 
                                                            average      Earnings 
                                                             number     per share 
                                             Earnings     of shares         pence 
                                              GBP'000         '000s 
------------------------------------  ---------------  ------------  ------------ 
 Basic earnings per share 
 Profit attributable to ordinary 
  shareholders                                    984                        0.8p 
 Basic earnings per share                         984       124,477          0.8p 
------------------------------------  ---------------  ------------  ------------ 
 Diluted earnings per share 
 Profit attributable to ordinary 
  shareholders                                    984                        0.8p 
------------------------------------  ---------------  ------------  ------------ 
 Diluted earnings per share                       984       126,909          0.8p 
------------------------------------  ---------------  ------------  ------------ 
 
 
 
 
                                         6 months to 30 June 2020 
                                                (Unaudited) 
 
                                                    Weighted 
                                                     average        Earnings 
                                                      number             per 
                                      Earnings     of shares           share 
                                       GBP'000         '000s           pence 
---------------------------------  -----------  ------------  -------------- 
 Basic earnings per share 
 Profit attributable to ordinary 
  shareholders                             745                          0.6p 
 Basic earnings per share                  745        124,477           0.6p 
---------------------------------  -----------  -------------  ------------- 
 Diluted earnings per share 
 Profit attributable to ordinary 
  shareholders                             745                          0.6p 
 Diluted earnings per share                745        126,564           0.6p 
---------------------------------  -----------  -------------  ------------- 
 
 
 
                                            Year ended 31 December 2020 
                                                      (Audited) 
 
                                                       Weighted 
                                                        average      Earnings 
                                                         number     per share 
                                         Earnings     of shares         pence 
                                          GBP'000         '000s 
------------------------------------  -----------  ------------  ------------ 
 Basic earnings per share 
 Profit attributable to ordinary 
  shareholders                              1,294                        1.0p 
 Basic earnings per share                   1,294       124,477          1.0p 
------------------------------------  -----------  ------------  ------------ 
 Diluted earnings per share 
 Profit attributable to ordinary 
  shareholders                              1,294                        1.0p 
------------------------------------  -----------  ------------  ------------ 
 Diluted earnings per share                 1,294       126,862          1.0p 
------------------------------------  -----------  ------------  ------------ 
 
 
 

Adjusted earnings

The directors believe that adjusted EBITDA, adjusted earnings and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These measures are used by management for internal performance analysis and incentive compensation arrangements. The term "adjusted" is not a defined term used under IFRS and may not therefore be comparable with similarly titled profit measurements reported by other companies. The principal adjustments are made in respect of the amortisation of acquired intangibles, share based payment expense, non-recurring items and exchange gains or losses charged to the income statement and their related tax effects. This definition was updated in 2020 and the comparative figure for H1 2020 is restated.

The reconciliation between reported and underlying earnings and basic earnings per share is shown below:

 
                                                6 months           6 months        Year ended 
                                              to 30 June         to 30 June       31 December 
                                                    2021               2020              2020 
                                                   Total              Total             Total 
                                             (Unaudited)        (Unaudited)         (Audited) 
                                            Earnings           Earnings          Earnings 
                                         GBP'000   Pence   GBP'000    Pence   GBP'000   Pence 
--------------------------------------  --------  ------  --------  -------  --------  ------ 
 Reported earnings per share                 984    0.8p       745     0.6p     1,294    1.0p 
 Amortisation of acquired intangibles 
  after tax                                    -    0.0p       126     0.1p       126    0.1p 
 Share based payment expense                  13    0.0p        27     0.0p        12    0.0p 
 Exchange (gains)/losses                      27    0.0p      (83)   (0.1)p      (12)    0.0p 
                                        --------  ------  --------  -------  --------  ------ 
 Adjusted earnings per share               1,024    0.8p       815     0.6p     1,420    1.1p 
--------------------------------------  --------  ------  --------  -------  --------  ------ 
 

8. INTANGIBLE ASSETS

 
                                                     Acquired        Acquired    Capitalised 
                                                     customer    intellectual    development 
                                    Goodwill    relationships        property          costs      Total 
                                     GBP'000          GBP'000         GBP'000        GBP'000    GBP'000 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
Cost 
At 1 January 2020 (audited)            3,218            4,493           3,350          4,122     15,183 
Additions (unaudited)                      -                -               -            620        620 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 30 June 2020 (unaudited)            3,218            4,493           3,350          4,742     15,803 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 1 January 2020 (audited)            3,218            4,493           3,350          4,122     15,183 
Additions (audited)                        -                -               -          1,301      1,301 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 1 January 2021 (audited)            3,218            4,493           3,350          5,423     16,484 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
Additions (unaudited)                      -                -               -            711        711 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 30 June 2021 (unaudited)            3,218            4,493           3,350          6,134     17,195 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
Accumulated amortisation 
At 1 January 2020 (audited)                -            4,337           3,350          2,825     10,512 
Charge for the period (unaudited)          -              156               -            405        561 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 30 June 2020 (unaudited)                -            4,493           3,350          3,230     11,073 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 1 January 2020 (audited)                -            4,337           3,350          2,825     10,512 
Charge for the year (audited)              -              156               -            815        971 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 1 January 2021 (audited)                -            4,493           3,350          3,640     11,483 
Charge for the period (unaudited)          -                -               -            415        415 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 30 June 2021 (unaudited)                -            4,493           3,350          4,055     11,898 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
Net book value 
At 30 June 2021 (unaudited)            3,218                -               -          2,079      5,297 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 31 December 2020 (audited)          3,218                -               -          1,783      5,001 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 30 June 2020 (unaudited)            3,218                -               -          1,512      4,730 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
At 1 January 2020 (audited)            3,218              156               -          1,297      4,671 
----------------------------------  --------  ---------------  --------------  -------------  --------- 
 

The amortisation of development costs is included in research and development expenses in the Consolidated Group Income Statement. Within capitalised development costs there are GBP2.8 million (2020: GBP2.0 million) of fully written down assets that are still in use.

9. CASH FLOW GENERATED FROM OPERATING ACTIVITIES

Reconciliation of profit before taxation to net cash flows from operating activities.

 
                                                     6 months     6 months     Year ended 
                                                   to 30 June        to 30    31 December 
                                                         2021    June 2020           2020 
                                                        Total        Total          Total 
                                                  (Unaudited)  (Unaudited)      (Audited) 
                                                      GBP'000      GBP'000        GBP'000 
-----------------------------------------------  ------------  -----------  ------------- 
 Profit before tax                                      1,003          739          1,095 
 Depreciation of property, plant and equipment            114          124            234 
 Amortisation and impairment of development 
  costs                                                   415          405            815 
 Amortisation and impairment of acquired 
  intangibles                                               -          156            156 
 Share based payment expense                               13            6             12 
 Finance income                                             -          (1)            (1) 
 Finance costs                                            168          195            374 
 Increase in inventories                                (134)         (48)            (8) 
 Decrease in trade and other receivables                   68          124            343 
 Increase/(decrease) in trade and other 
  payables                                                383         (97)          (536) 
 Net cash generated from operating activities           2,030        1,603          2,484 
-----------------------------------------------  ------------  -----------  ------------- 
 
   10.        NET FUNDS 

Reconciliation of change in cash and cash equivalents to movement in net cash:

 
                                                   Net cash and   Other borrowings   Total net 
                                               cash equivalents            GBP'000        cash 
                                                        GBP'000                        GBP'000 
-------------------------------------------  ------------------  -----------------  ---------- 
 At 1 January 2021                                          826            (8,550)     (7,724) 
 Cash flow for the period before financing                1,111                  -       1,111 
 Movement in borrowings in the period                     (500)                500           - 
 Exchange rate adjustments                                    7                  -           7 
-------------------------------------------  ------------------  -----------------  ---------- 
 Cash and cash equivalents at 30 June 
  2021 (Unaudited)                                        1,444            (8,050)     (6,606) 
-------------------------------------------  ------------------  -----------------  ---------- 
 At 1 January 2020                                        1,144            (9,550)     (8,406) 
 Cash flow for the period before financing                  710                  -         710 
 Movement in borrowings in the period                     (380)                380           - 
 Exchange rate adjustments                                 (79)                  -        (79) 
-------------------------------------------  ------------------  -----------------  ---------- 
 Cash and cash equivalents at 30 June 
  2020 (Unaudited)                                        1,395            (9,170)     (7,775) 
-------------------------------------------  ------------------  -----------------  ---------- 
 At 1 January 2020                                        1,144            (9,550)     (8,406) 
 Cash flow for the year before financing                    657                  -         657 
 Movement in borrowings in the year                     (1,000)              1,000           - 
 Exchange rate adjustments                                   25                  -          25 
-------------------------------------------  ------------------  -----------------  ---------- 
 Cash and cash equivalents at 31 December 
  2020 (Audited)                                            826            (8,550)     (7,724) 
-------------------------------------------  ------------------  -----------------  ---------- 
 

Ends

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September 08, 2021 02:00 ET (06:00 GMT)

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