TIDMTPX
RNS Number : 1225U
TPXimpact Holdings PLC
01 December 2021
1 December 2021
TPXimpact Holdings PLC (previously The Panoply Holdings Plc)
("TPXimpact", "TPX" or the "Company")
Interim Results
TPXimpact Holdings PLC (AIM: TPX), the technology-enabled
services company focused on digital transformation, is pleased to
announce its interim results for the six months ended 30 September
2021.
Financial highlights:
-- Revenue up 77% to GBP37.5m (H1 2021: GBP21.2m)
o Organic like-for-like(1) revenue growth of 2 1%
-- Statutory EBITDA of GBP3.8m (H1 2021: GBP0m)
-- Adjusted EBITDA(2) up 83% to GBP5.3m (H1 2021: GBP2.9m)
-- Adjusted EBITDA(2) margin up to 14.1% from 13.7% in the
prior year
-- Statutory profit after tax of GBP0.3m (H1 2021: loss
of GBP1.8m)
-- Basic earnings per share of 0.3p (H1 2021: loss per share
2.9p)
-- Adjusted profit after tax(3) of GBP4. 4m (H1 2021: GBP2.1m)
-- Adjusted diluted earnings per share(4) of 4.7p (H1 2021:
2.6p)
-- Cash conversion(5) of 118% (H1 2021: 102%) and adjusted
cash at bank(6) of GBP8.4m as at 30 September 2021 (30
September 2020: GBP5.9m). Adjusted net debt(7) as at
30 September 2021 of GBP4.7m (30 September 2020: GBP1.2m)
-- Sales backlog(8) as at 1 October 2021 of GBP 34.6m to
31 March 2022 (1 October 2020: GBP17.5m)
-- An interim dividend of 0.3 pence per share has been declared
for H1. This will be paid on 28 January 2022 to shareholders
on the register at the close of business on 21 January
2022
Operational and Impact highlights:
-- GBP54m of total contract wins in H1 2022, up 116% (H1
2021: GBP25m)
-- 74% of revenue from public services in the period (H1
2021: 70%), with Local Government representing 14%, Central
Government 36%, Healthcare 8%, Education 6% and the remaining
10% coming from other public services
-- Completion of acquisition of Nudge Digital and appointment
of Noel Gordon as advisor to the Company, strengthening
TPX's proposition in the healthcare sector
-- Entrance into new sectors including the utilities sector
-- Launched Employee Resource Groups (ERG's) for women,
LGBTQI employees and minority ethnic employees
-- Achieved Social Value Quality Mark Level 1 in recognition
of the Company's commitment to research, measure and
report social impact and value
-- Launched a board mentoring programme, focused on connecting
diverse future talent within the group with a PLC board
mentor
-- Name change from The Panoply Holdings PLC and start of
consolidation of Group businesses to the single brand
of TPXimpact Holdings PLC, paving the way for continued
growth and targeting of larger projects
Other KPIs:
-- 5 contracts signed over GBP3m (H1 2021: 2) and 7 customers
billed over GBP1m (H1 2021: 3)
-- Average contract spend increased to GBP141k (H1 2020:
GBP94k)
-- 267 customers billed in H1 2022 (H1 2021: 225)
-- 76% of customers billed in H1 2022 also billed in FY
2021 , FY 2020 and/or FY 2019
-- Top ten clients generating 43% of revenue (H1 2020: 34%),
reflecting larger contract values
Neal Gandhi, Chief Executive Officer, commented:
"I'm delighted to report on another period of very strong growth
for the Company, in which we have continued to deliver impactful
digital change to organisations across the public, not-for-profit
and commercial sectors. As a reflection of the considerable
operational progress and reputational growth we have achieved, we
report significant organic, like-for-like growth versus the
equivalent period last year as we take on larger, more impactful
projects across our markets.
"During the period we announced our change of name, reflecting
the ongoing transformation of our business through consolidation
from 13 businesses into a single, unified brand: TPXimpact. We
expect the integration of our businesses to complete in the spring
of 2022 but are already seeing the enhanced benefits of operating
under this unitary structure.
"We remain focused on executing our strategy in line with our
2025 commercial vision of delivering 10-15% organic revenue growth
per annum and GBP200m run rate revenue by March 2025. We are
confident of delivering significant further growth into H2 and
beyond, in line with our recently upgraded expectations."
A video overview of the results is available to watch here:
https://bit.ly/TPX_H122_overview
TPX will be hosting a webinar for analysts at 11 a.m. today. If
you would like to register for the analyst webinar, please contact
tpx@almapr.co.uk .
The Company will also be hosting a webinar for retail investors
at 11 a.m. on 2 December. Retail investors can register for the
webinar using the following link: https://bit.ly/TPX_H1_webinar
.
(1) Like-for-like is a non-GAAP/IFRS measure that presents the
prior year being restated to show the unaudited numbers of the
existing and acquired businesses consolidated for the same number
of months as they have been in FY2022. For FY2021, this
incorporates the like-for-like pre-acquisition results for
Arthurly, Difrent, Keep IT Simple and Nudge Digital as if they have
been included in the Group for the same amount of time as they have
been in FY2022.
(2) Adjusted EBITDA is a non-IFRS measure that the Company uses
to measure its performance and is defined as earnings before
interest, taxation, depreciation and amortisation and after add
back of costs related to acquisitions, restructuring and other one
off costs made by the Group, investments made in relation to the
sales and marketing of OpenDialog, fair value adjustments and share
based payment charge.
(3) Adjusted profit after tax is calculated as a non-IFRS
measure. To arrive at adjusted profit after tax, adjustments made
include the add back of acquisition, restructuring and other one
off costs, amortisation related to acquired intangibles,
share-based payments, the impact of fair value adjustments and the
tax impact of these adjustments.
(4) Adjusted diluted earnings per share is calculated based on
adjusted profit before tax as defined above. An adjusted diluted
share count is calculated by taking the weighted average basic
shares and including the maximum shares to be issued in respect of
contingent consideration to be paid based on performance measures
met in the period, together with the maximum share options
outstanding.
(5) Cash conversion is calculated by reference to adjusted
profit before tax after deducting the costs relating to
acquisitions and restructuring
(6) Cash in bank figure has been reduced by GBP2.1m reflecting
the completion cash payable to the sellers of Nudge Digital. This
was settled in Q3 FY2022
(7) Adjusted net debt is calculated excluding the impact of
lease liabilities and by reducing the impact of GBP2.1m completion
cash payable to the sellers of Nudge Digital.
(8) The value of contracted revenue that has yet to be
recognised.
Enquiries
TPXimpact Via Alma PR
Neal Gandhi (CEO)
Oliver Rigby (CFO)
Stifel Nicolaus Europe Limited +44 (0)207 710 7600
(Nomad and Joint Broker)
Alex Price
Fred Walsh
Dowgate Capital Limited +44 (0)203 903 7715
(Joint Broker)
James Serjeant
Nicholas Chambers
Alma PR tpx@almapr.co.uk
(Financial PR) +44 (0)203 405 0209
Susie Hudson
Kieran Breheny
Matthew Young
About TPXimpact
TPXimpact exists to transform the organisations, services and
systems that underpin society and that drive business success. It
applies strategic and creative thinking, technology, innovative
design and user-centred approaches to bring about numerous
improvements which together multiply the impact of change. The
Company works closely with its clients in agile, multidisciplinary
teams that span organisational design, technology, and digital
experiences. It shares a deep understanding of people and
behaviours and a philosophy of putting people and communities at
the heart of every transformation.
The business is being increasingly recognised as a leading
alternative digital transformation provider to the UK public
services sector, with c.75% of its client base representing the
public sector and c.26% representing the commercial sector.
More information is available at www.tpximpact.com .
Chief Executive's review
I am pleased to report on another period of substantial growth
for TPXimpact.
At our year-end results presentation in July 2021, we announced
a set of new, ambitious financial goals in our Commercial Vision
for 2025. As part of this vision we set out to achieve a run rate
revenue of GBP200m (GBP150m public sector, GBP50m commercial
sector) by March 2025 and to deliver 10-15% organic revenue growth
per annum.
We have made excellent progress against these goals in the first
half of FY22. I'm particularly pleased with our organic
like-for-like revenues, which were up 21% on the prior period, to
ahead of our updated guidance of 15%-20% for the current financial
year. For the six months to 30 September 2021, revenues grew 77% to
GBP37.5m and adjusted EBITDA increased 83% to GBP5.3m versus the
same period in the prior year, reflecting our operational progress
alongside the substantial acquisitive activity we have undertaken
over the last year.
We signed GBP54m worth of new contracts during the period, up
116% on the prior period and go into H2 with a sales backlog to
March 2022 of GBP34.6m, up 98% year-on-year. We have continued to
increase the average size of contracts won, reflecting the larger
and more impactful projects our teams are now working on.
As anticipated, our gross margins reduced slightly in the period
from 35% in H1 2021 to 31% in H1 2022. The margin movement reflects
the very strong organic growth during the period, which resulted in
a greater proportion of contractors used to meet the demand for our
services as well as a growth in our recurring revenue up from 23%
in H1 2021 to 33% H1 2022, which is typically sold at a lower gross
margin but gives longer term revenue visibility. As we complete the
restructure and move to one business, we expect margins to
strengthen again in the mid-term as the balance of staff shifts
back towards full time employees.
Performance against growth strategy
Consolidation under TPXimpact
In September 2021, we launched our new single brand - TPXimpact
- under which all our Group businesses will come together, seeing
the Company operate under a single P&L structure with a single
sales, account management and back-office structure in the UK.
As part of this consolidation, we have already restructured our
sales organisation operation and made investments into our staff.
The project has started well and, post-period, our leadership teams
are now in place to enable first-class performance and support
across all the areas in which we operate.
Whilst the move to one brand will incur some one-off exceptional
costs, we are confident in the longer term it will significantly
benefit the Company, enabling us to take on larger and more
significant contracts as a result of our combined capabilities and,
ultimately, to deliver more meaningful change in wider society.
Continued growth in key markets including healthcare
We have increased our reach in the UK public sector, which now
accounts for 74% of revenue. In particular, healthcare has emerged
as an exciting opportunity for TPX and reflecting this we have
greatly strengthened our reach in this field through acquisition
and key contract wins, including NHS Blood and Transplant and NHS
Business Services Authority, as well as NHS Digital and NHSx, which
are soon to become part of NHS England.
With a view to continuing to grow in this vertical we have taken
steps to strengthen our advisory team in the period with the
appointment of Noel Gordon as a Senior Advisor to the Company in
July 2021. Noel has a wealth of experience across public healthcare
having formerly been a non-exec board member at NHS England and
Chair of NHS Digital and has already helped secure our position as
a powerful player in these industries.
Alongside healthcare, we have made significant strides in other
sectors including utilities and the pharmaceutical industry, with
the Company having previously announced on 15 September 2021 a
significant win in the utilities sector representing a value of up
to GBP10m over five years.
Acquisition of Nudge Digital, expanding vertical reach
During the period, the Company completed the acquisition of
Bristol-based digital services agency Nudge Digital ("Nudge") for a
total consideration of GBP5m. Nudge enhances the Company's reach
into a number of key markets, including healthcare, pharmaceuticals
and local government and brought a further 20 full-time employees
into the business.
Significantly, this acquisition was structured to reduce the
dilution of shares, removing earn-outs to ensure fast and seamless
integration into the wider Company. We intend to maintain this
acquisition structure going forward wherever possible.
Our acquisition pipeline for profitable, cash-generative
companies remains strong, and we are in particular examining
opportunities with a focus on data. We are also exploring possible
targets in regional hubs in the UK.
Building out our team
Our pipeline of new talent is strong, and we aim to create 500
new jobs by 2025. In H1 we have hired 103 new starters on top of
those brought in via acquisition. Our business has always been
focused on building a group of experts in digital transformation,
who are innovative, purpose driven and want to make real change.
The fact we have been able to hire at this rapid pace through a
period of well-reported recruitment challenges in technology is
testament to what TPX can offer potential staff. In addition, our
commitment to delivering impactful work, alongside our strong ESG
stance and ambition to become B-Corp certified, allows us to
attract high quality staff eager to work to help transform public
services.
We remain committed to investing in our staff through various
channels. Employee wellbeing, for example, is a central value for
TPXimpact and we are proud to provide free access to an Employee
Assistance Programme (EAP) for all UK employees, enabling
confidential support f or our people should problems arise in their
work life, home life, personal wellbeing or general health.
Investments for growth
On 23 September 2021, the Company launched the new brand
TPXimpact. Over the remainder of the financial year, existing
brands will be retired and the Company will move to a single,
integrated UK P&L to allow us to better address the market
opportunities ahead of us. Post-period end, all UK staff have been
transferred to a single UK legal entity and a new extended
management team has been appointed from various companies across
the Group. Alongside this restructuring, the Company is also
putting into place new finance, HR, CRM and PSA systems, all
designed to create greater efficiencies as we centralise
operations. These investments are ongoing, and we expect to see
these completed in FY 2023.
GreenShoot Labs
Over the last 12 months or so, the Company has been investing in
GreenShoot Labs to create a new Conversational AI SaaS product.
This was launched in August 2021. The product, called OpenDialog,
is positioned in a market growing at a CAGR of 23%* and expected to
be worth as much as $25bn by 2028. OpenDialog is showing early
signs of success with numerous globally significant organisations
showing interest. However, in order to maximise the opportunities
ahead, the Company expects to spin out OpenDialog into a new
company over the next 12 months so that it can attract the level of
finance it requires in order to fulfil its potential and become a
significant enterprise software company. TPXimpact aims to retain a
minority holding in this new company as it is spun out with
shareholders participating in its future success through that
holding.
More information available at: https://opendialog.ai/
*Marketwatch.com, October 21, 2021
Our purpose in action (ESG)
We continue to work towards B-Corp certification, something we
are confident of achieving but will only become possible once we
become a single legal entity in the UK. Therefore, we have set
ourselves the goal of achieving B-Corp certified by no later than
March 2023. We also achieved our Social Value Quality Mark Level 1
and were shortlisted for several ESG-focussed awards, recently
winning the IR Society Award for best ESG Communications.
People
TPXimpact is committed to enacting real, impactful change and
championing diversity through action striving to both reflect the
diverse communities the Company serves and to be accessible to
people from all backgrounds. Key progress in the first half
included the launch of our Employee Resource Groups, as well as the
launch of our board mentoring programme, which is focused on
connecting diverse future talent within the group with a PLC board
mentor.
Planet
Notable progress against our environmental aims in the period
has included the signing of two new leases, both of which are 100%
powered by renewables and a number of employees having switched to
electric cars through our Electric Vehicle Leasing scheme.
We remain committed to net zero. We:
-- are carbon neutral;
-- have ambitious reduction targets in place;
-- will have fulfilled our commitment to paying back the
entirety of our historic emissions by March 2023;
and
-- are working to get our reduction plan accredited by Science Based Targets Initiative (SBTI)
Communities
TPX has undertaken several community projects in the period
including sponsoring our second Arkwright Scholar, hosting a Future
Leaders programme for black entrepreneurs and launching a
GBP100,000 community action grant fund.
Market update
It is evident that the UK public sector has made an irrevocable
shift towards digital transformation services with a September 2021
report by TechMarketView predicting that the UK public sector
software and IT services (SITS) market will be worth approximately
GBP14.3bn by 2024, up from GBP12.9bn in 2020.
Within this substantial market growth, government spending in
healthcare, a key market for the Company, is expected to grow
strongly. The recent October 2021 spending review also committed to
increased government spending in healthcare, totalling GBP11.2bn
over three years. Within this, around GBP2.1bn is expected to be
invested in IT, technology and digitising the NHS, supporting the
Company's growth ambitions in this sector.
TPX is well-positioned to displace existing providers in the
SITS sector. TechMarketView outlines the proportion of software
& services spending on new technologies is also expected to
grow from 31% in 2019 up to 57% in 2024, with spending on new
software & services expected to outweigh heritage by 2023. This
is where our real market opportunity lies.
Outlook and current trading
Following a record GBP54m of new contracts signed in H1 (H1
2021: GBP25m), we go into H2 with a confirmed backlog to be
recognised in the period of GBP34.6m. Combined with the GBP37.5m
revenues achieved in H1, we can confidently state that we will meet
recently upgraded market expectations of revenue for the full year
in excess of GBP77m accompanied by Adjusted EBITDA margin
expansion.
It is clear that hybrid ways of working are here to stay.
Consequently, our recruitment process is now open to candidates
from across the UK whereas pre-pandemic, it would have focused on
candidates that were primarily able to be located in our London
offices. This presents us with an opportunity to attract the best
talent nationwide, rather than just those within a commutable
distance to London. Further, since the way we service our public
sector clients has never been predicated on hiring staff at lower
salary levels outside of London, we do not anticipate this
'levelling-up' change being experienced by other businesses to have
any adverse impact on our margins.
Our primary market continues to grow at pace with the public
sector's ongoing transition to modern technologies and the
associated change remaining a decade long opportunity. Public
sector buyers are also beginning to recognise the value that
mid-market organisations can offer compared to their traditional
suppliers and it is pleasing to note that they now see TPXimpact as
a scaled, mid-market supplier and are awarding us ever larger
contracts as a consequence.
Finally, through consolidation to a single brand, we expect to
build on our organic growth, alongside identifying further
complementary acquisitions to integrate into the Company. There are
a number of key initiatives underway that will drive our success as
a single company, including changing our contractor to full-time
employee ratio, centralising our people function and creating a
central sales and account management team.
We are excited for what the future holds and look forward to
continuing to build value for all our stakeholders.
Neal Gandhi
CEO
Financial review
The 6 month period ending 30 September 2021 saw another step
forward for TPXimpact with significant year on year revenue and
EBITDA growth. TPXimpact has reported revenues of GBP37.5m, up 77%
from GBP21.2m in H1 2021. Most pleasingly we have seen continued
like-for-like organic revenue growth north of our 10-15% commercial
vision at 21%. The growth has largely been driven by the Group's
ability to win and deliver larger scale programmes of work as a
result of its wider service offering and leading case studies. In
the period we saw the Group sign five deals each with a total value
of GBP3m or more (H1 2021: 2). Revenue also benefited from the half
year impact of FY2021 acquisitions and the acquisitions of Nudge in
June 2021. The business continued its focus on public services with
74% of revenue in the sector (H1 2021: 70%).
We have seen a strong rise in our recurring revenue with the
acquisition of Keep IT Simple Ltd. (KITS) in the prior period.
Recurring revenue accounted for 33% of revenue in the period, up
from 23% in H1 2021. We continued to see a large amount of repeat
business from customers, with 76% of customers billed in H1 2022
also billed in FY 2021, FY 2020 and/or FY 2019. Our backlog was
GBP34.6m at 30 September to be delivered in H2 2022 (H1 2021:
GBP17.5m).
Gross Margins were at 31% against 35% in the prior year. As
previously noted the reduction has been driven by our strong growth
in revenue requiring a greater proportion of contractor delivery
together with a change in the makeup of the delivery of the
services that the Group provides, with growth in our managed
services and recurring business from 23% to 33% of revenues. Our
ambition is to increase our gross margin over time through
centralised recruitment, a reduction in our reliance on
contractors, investment into an academy and use of our nearshore
office where appropriate.
Adjusted EBITDA was GBP5.3m up from GBP2.9m in H1 2021
representing an increase of 83%. Statutory EBITDA was GBP3.8m, up
from a GBP0.1m loss in H1 2021 . Adjusted EBITDA margin was 14.1%
up from 13.7% in the prior year. This increase in margin is very
positive and in spite of the fact that we have seen a year on year
increase in operating overhead linked to travel and entertainment
following the easing of Covid restrictions.
We are pleased to report our first statutory profit after tax of
GBP0.3m (H1 2021: GBP1.7m loss) and EPS of 0.3p per share (H1 2021:
loss 2.9p) although the Directors continue to believe that an
'adjusted profit before tax' and an 'adjusted EPS' measure is more
representative of the underlying performance. To arrive at adjusted
results, adjustments made include acquisition expenses,
amortisation related to acquired intangibles and share-based
payments and the impact of fair value adjustments along with the
corresponding tax impact of the adjustments. In addition we have
invested into OpenDialog, our conversational design product.
Investment has been made with a view to spinning the business out
of TPXimpact within the next 12 months and we have therefore
excluded costs relating to it totalling GBP0.3m.
The fair value adjustment reflects stronger than forecast
performance of the Group companies and amortisation is a charge
that does not reflect the underlying performance or prospects of
the Group.
The following table summarises the adjustments:
6 months to 30 6 months to 30 Year ended 31
Sep 2021 Sep 2020 Mar 2021
GBP'000s GBP'000s GBP'000s
Unaudited Unaudited Audited
Profit / (loss)
before tax 559 (1,571) (1,845)
--------------- --------------- --------------
Amortisation
of intangible
assets relating
to acquisitions 2,486 970 2,458
--------------- --------------- --------------
Loss from fair
value movement
in contingent
consideration 668 2,520 4,260
--------------- --------------- --------------
Share-based Payments 192 150 294
--------------- --------------- --------------
Costs relating
to acquisition,
restructuring
and investment
in Open Dialog 430 263 746
--------------- --------------- --------------
Investment in 258 - -
Open Dialog
--------------- --------------- --------------
Adjusted profit
before tax 4,593 2,332 5,913
--------------- --------------- --------------
Tax (including
impact of amortisation
and costs relating
to acquisition
and restructuring
adjustments) (180) (260) (898)
--------------- --------------- --------------
Adjusted profit
after tax 4,413 2,072 5,015
--------------- --------------- --------------
As a result of the acquisitive nature of the Group and its use
of shares as consideration, the Directors believe that an adjusted
share count for the purposes of calculating earnings per share is
required. As such the Directors calculate an adjusted diluted share
number by taking the weighted average basic shares and including
the maximum shares to be issued in respect of contingent
consideration to be paid based on performance measures met in the
period, together with the maximum share options outstanding. The
following table summarises the adjustments:
6 months to 30 6 months to 30 Year ended 31
Sep 2021 Sep 2020 Mar 2021
Weighted average
basic shares
('000) 83,655 56,935 63,784
--------------- --------------- --------------
Shares relating
to future contingent
consideration
('000) 7,212 18,667 13,728
--------------- --------------- --------------
Shares relating
to share-based
payments ('000) 3,551 4,777 4,436
--------------- --------------- --------------
Adjusted diluted
shares ('000) 94,418 80,379 81,948
--------------- --------------- --------------
Adjusted diluted
earnings per
share (pence) 4.7 2.6 6.1
--------------- --------------- --------------
Based on these alternative non-GAAP measures the Group achieved
adjusted profit after tax of GBP4.4m (H1 2021: GBP2.1m) resulting
in adjusted diluted earnings per share of 4.7p (H1 2021: 2.6p).
Note that based on the share price of GBP2.65 as at 30 November
2021 the total number of shares relating to future contingent
consideration would be 2,153k resulting in an EPS of 4.9p.
Cash Flow and cash conversion
Cash at the end of the period was GBP10.4m but this included
GBP2.1m that was payable to the shareholders of Nudge post period
end. Excluding this our true cash balance was GBP8.4m with adjusted
net debt of GBP4.7m (which excludes lease liabilities and
theGBP2.1m cash payable to Nudge). This strong adjusted net debt
position well below our current maximum target of 1x EBITDA
provides us with significant access to cash for further
acquisitions.
Net cash generated from operations before tax and including
lease payments was GBP4.5m. Cash conversion, calculated by
reference to the adjusted profit before tax but after deducting
costs relating to acquisition and restructuring was 118%.
Adjusted net debt has fallen in the period from GBP7.3m as at 31
March 2021 to GBP4.7m despite the acquisition of Nudge in the
period. The cash consideration for the acquisitions was GBP1.8m
funded from the Group's cash reserves
Balance Sheet
Total deferred consideration at 30 September 2021 was GBP8.4m
(31 March 2021 was GBP12.2m). We continue to note that this is a
liability that will be satisfied through the issue of shares and
not through cash. Once this is removed, the Group's current ratio
at the period end was 1.9 (H1 2021: 1.7) providing solid
liquidity.
Dividend
A dividend of 0.3 pence per share has been declared for H1 2022
(H1 2021: 0.2 pence). This will be paid on 28 January 2022 to
shareholders on the register at the close of business on 21 January
2022.
Oliver Rigby
Chief Financial Officer
Consolidated statement of comprehensive income
6 months to 6 months 12 months
30 September to 30 September to 31 March
2021 2020 2021
------ ----------------------------------------------------- ------------------ -------------
Unaudited Unaudited Audited
------ ----------------------------------------------------- ------------------ -------------
Notes GBP'000 GBP'000 GBP'000
------ ----------------------------------------------------- ------------------ -------------
Revenue 37,495 21,175 51,097
------ ----------------------------------------------------- ------------------ -------------
Cost of sales (25,866) (13,729) (34,968)
------ ----------------------------------------------------- ------------------ -------------
Gross profit 11,629 7,446 16,129
------ ----------------------------------------------------- ------------------ -------------
Administrative
expenses (10,729) (8,885) (18,085)
------ ----------------------------------------------------- ------------------ -------------
Other income 52 3 413
------ ----------------------------------------------------- ------------------ -------------
Operating profit /
(loss) 952 (1,436) (1,543)
------ ----------------------------------------------------- ------------------ -------------
Finance income 14 2 1
------ ----------------------------------------------------- ------------------ -------------
Finance costs (407) (137) (303)
------ ----------------------------------------------------- ------------------ -------------
Net finance costs (393) (135) (302)
------ ----------------------------------------------------- ------------------ -------------
Profit / (loss)
before
tax 559 (1,571) (1,845)
------ ----------------------------------------------------- ------------------ -------------
Taxation (281) (96) (384)
------ ----------------------------------------------------- ------------------ -------------
Profit / (loss) for
the
period 278 (1,667) (2,229)
------ ----------------------------------------------------- ------------------ -------------
Other comprehensive
income
------ ----------------------------------------------------- ------------------ -------------
Exchange
differences on
translation of
foreign
operations (82) (72) 68
------ ----------------------------------------------------- ------------------ -------------
Total comprehensive
income
/ (loss) for the
period 196 (1,739) (2,161)
------ ----------------------------------------------------- ------------------ -------------
Earning / (Loss)
per share
------ ----------------------------------------------------- ------------------ -------------
Basic 7 0.33p (2.93)p (3.5)p
------ ----------------------------------------------------- ------------------ -------------
Fully diluted 7 0.33p (2.93)p (3.5)p
------ ----------------------------------------------------- ------------------ -------------
Consolidated statement of financial
position
30 Sept
2020
30 Sept 2021 (Restated) 31 Mar 2021
---- --------------------------- ------------ ------------
Unaudited Unaudited Audited
---- --------------------------- ------------ ------------
GBP'000 GBP'000 GBP'000
---- --------------------------- ------------ ------------
Non-current assets
---- --------------------------- ------------ ------------
Goodwill 56,616 42,414 53,323
--------------------------- ------------ ------------
Intangible assets 28,412 10,525 29,370
--------------------------- ------------ ------------
Property, plant and equipment 292 288 292
--------------------------- ------------ ------------
Right-of-use assets 263 743 445
--------------------------- ------------ ------------
Deferred tax asset 30 - 15
--------------------------- ------------ ------------
Total non-current assets 85,613 53,970 83,445
--------------------------- ------------ ------------
Current assets
---- --------------------------- ------------ ------------
Trade and other receivables 11,135 9,142 14,014
--------------------------- ------------ ------------
Contract asset 2,832 1,312 1,144
--------------------------- ------------ ------------
Other taxes and social security
costs - - 137
--------------------------- ------------ ------------
Cash and cash equivalents 10,413 5,909 5,734
--------------------------- ------------ ------------
Total current assets 24,380 16,363 21,029
--------------------------- ------------ ------------
Total assets 109,993 70,333 104,474
--------------------------- ------------ ------------
Current liabilities
---- --------------------------- ------------ ------------
Trade and other payables 6,218 4,492 5,681
--------------------------- ------------ ------------
Other taxes and social security
costs 5,016 4,068 5,326
--------------------------- ------------ ------------
Lease liability 271 474 336
--------------------------- ------------ ------------
Deferred and contingent consideration 7,775 8,643 8,478
--------------------------- ------------ ------------
Contract liability 1,620 1,102 1,941
--------------------------- ------------ ------------
Borrowings 53 90 55
--------------------------- ------------ ------------
Total current liabilities 20,953 18,869 21,817
--------------------------- ------------ ------------
Non-current liabilities
Deferred tax liabilities 4,643 1,860 5,133
--------------------------- ------------ ------------
Borrowings 13,000 7,000 13,000
--------------------------- ------------ ------------
Provisions 76 27 76
--------------------------- ------------ ------------
Lease liability 77 222 53
--------------------------- ------------ ------------
Deferred and contingent consideration 630 4,829 3,741
--------------------------- ------------ ------------
Total non-current liabilities 18,426 13,938 22,003
--------------------------- ------------ ------------
Total liabilities 39,379 32,807 43,820
--------------------------- ------------ ------------
Net assets 70,614 37,526 60,654
--------------------------- ------------ ------------
EQUITY
---- --------------------------- ------------ ------------
Issued share capital 848 673 804
--------------------------- ------------ ------------
Share premium 6,253 5,673 5,691
--------------------------- ------------ ------------
Merger reserve 70,231 37,531 60,926
--------------------------- ------------ ------------
Other reserves 402 517 801
--------------------------- ------------ ------------
Retained earnings (7,120) (6,868) (7,568)
--------------------------- ------------ ------------
Total equity 70,614 37,526 60,654
--------------------------- ------------ ------------
Consolidated statement of changes in equity
Share Share Merger Capital Foreign Share Retained Total
capital premium Reserve redemption exchange option earnings
reserve reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------ ------------ ------------ ----------- ----------- ----------- ----------- --------
Balance at 1
April 2019
(Restated) 423 5,673 15,106 5 (38) 239 (2,157) 19,251
Profit for
the period - - - - - - 328 328
Exchange
difference
on
translation
of foreign
operations - - - - 36 - - 36
Transactions
with owners
Shares issued 66 - 5,720 - - - - 5,786
Share based
payments - - - - - 9 - 9
-------------- ------------ ------------ ------------ ----------- ----------- ----------- ----------- --------
Balance at 30
September
2019
(Restated) 489 5,673 20,826 5 (2) 248 (1,829) 25,410
-------------- ------------ ------------ ------------ ----------- ----------- ----------- ----------- --------
Loss for the period - - - - - - (3,372) (3,372)
Exchange difference on translation of foreign operations - - - - 68 - - 68
Transactions with owners
Shares issued 62 - 4,978 - - - - 5,040
Share based payments - - - - - 120 - 120
---------------------------------------------------------- ---- ------ ------- --- ---- -------- --------
Balance at 31 March 2020 (Restated) 551 5,673 25,804 5 66 368 (5,201) 27,266
---------------------------------------------------------- ---- ------ ------- --- ---- -------- --------
Loss for the period - - - - - - (1,667) (1,667)
Exchange difference on translation of foreign operations - - - - (72) - - (72)
Transactions with owners
Shares issued 122 - 11,727 - - - - 11,849
Share based payments - - - - - 150 - 150
---------------------------------------------------------- ---- ------ ------- ----- ---- -------- --------
Balance at 30 September 2020 (Restated) 673 5,673 37,531 5 (6) 518 (6,868) 37,526
---------------------------------------------------------- ---- ------ ------- ----- ---- -------- --------
Loss for the period - - - - - - (562) (562)
Exchange difference on translation of foreign operations - - - - 140 - - 140
Transactions with owners
Shares issued 131 18 23,395 - - - - 23,544
Dividend paid - - - - - - (138) (138)
Share based payments - - - - - 144 - 144
---------------------------------------------------------- ---- ------ ------- ---- ---- -------- -------
Balance at 31 March 2021 804 5,691 60,926 5 134 662 (7,568) 60,654
---------------------------------------------------------- ---- ------ ------- ---- ---- -------- -------
Profit for the period - - - - - 278 278
Exchange difference on translation of foreign operations - - - (82) - - (82)
Transactions with owners
Shares issued 44 562 9,305 - - - - 9,911
Dividend paid - - - - - - (339) (339)
Share based payments - - - - - 192 - 192
Share options exercised - - - - - (509) 509 -
Balance at 30 September 2021 848 6,253 70,231 5 52 345 (7,120) 70,614
Consolidated Statement of
cash flow
6 months to 6 months 12 months
30 September to 30 September to 31 March
2021 2020 2021
----------------------------------- ------------------ -------------
Unaudited Unaudited Audited
----------------------------------- ------------------ -------------
GBP'000 GBP'000 GBP'000
----------------------------------- ------------------ -------------
Cash flows from operating
activities:
----------------------------------- ------------------ -------------
Profit / (loss) before tax 559 (1,571) (1,845)
----------------------------------- ------------------ -------------
Depreciation of property,
plant and equipment 295 383 835
----------------------------------- ------------------ -------------
Amortisation 2,553 995 2,509
----------------------------------- ------------------ -------------
Share-based payments 192 150 294
----------------------------------- ------------------ -------------
Foreign exchange losses/(gains) (27) (72) (5)
----------------------------------- ------------------ -------------
Finance expense 407 135 303
----------------------------------- ------------------ -------------
Finance income (14) - (1)
----------------------------------- ------------------ -------------
Movement in fair value consideration 688 2,520 4,260
----------------------------------- ------------------ -------------
4,653 2,540 6,350
-------------------------------------- ----------------------------------- ------------------ -------------
Working capital adjustments
----------------------------------- ------------------ -------------
Increase in trade and other
receivables 2,262 1,243 (1,032)
----------------------------------- ------------------ -------------
Decrease/(increase) in trade
and other payables (1,959) (269) 483
----------------------------------- ------------------ -------------
4,956 3,514 5,801
-------------------------------------- ----------------------------------- ------------------ -------------
Tax received / (paid) 87 (341) (159)
----------------------------------- ------------------ -------------
Net cash generated from operating
activities 5,043 3,173 5,642
----------------------------------- ------------------ -------------
Cash flows from investing
activities:
----------------------------------- ------------------ -------------
Net cash received / (paid)
on acquisition of subsidiaries 658 (3,122) (10,813)
----------------------------------- ------------------ -------------
Deferred consideration paid (467) (160) (259)
----------------------------------- ------------------ -------------
Purchase of property, plant
and equipment (105) (44) (137)
----------------------------------- ------------------ -------------
Addition of intangible assets (183) (106) (321)
----------------------------------- ------------------ -------------
Interest received 14 - 1
----------------------------------- ------------------ -------------
Net cash used in investing
activities (83) (3,432) (11,529)
----------------------------------- ------------------ -------------
Net cash used from financing
activities
----------------------------------- ------------------ -------------
Proceeds from issue of new
shares on the exercise of
share options 511 - -
----------------------------------- ------------------ -------------
Repayment of borrowings (7) (7) -
----------------------------------- ------------------ -------------
New borrowings - 2,000 8,000
----------------------------------- ------------------ -------------
-
----------------------------------- ------------------ -------------
Payment of lease liabilities (41) (302) (610)
----------------------------------- ------------------ -------------
Dividend paid (339) - (138)
----------------------------------- ------------------ -------------
Interest paid (407) (137) (331)
----------------------------------- ------------------ -------------
Net cash (used) in /generated
from financing activities (283) 1,554 6,921
----------------------------------- ------------------ -------------
Net (decrease) / increase
in cash and cash equivalents 4,677 1,295 1,034
----------------------------------- ------------------ -------------
Cash and cash equivalents
at beginning of the period 5,734 4,614 4,614
----------------------------------- ------------------ -------------
Effect of exchange rate fluctuations
on cash held 2 - 86
----------------------------------- ------------------ -------------
Cash and cash equivalents
at end of the period 10,413 5,909 5,734
----------------------------------- ------------------ -------------
1. General information
TPXimpact Holdings Plc (formerly The Panoply Holdings plc) is
the Group's ultimate parent company. It is a public limited company
incorporated and domiciled in England and Wales with registered
office number 10533096. The Company's shares are publicly traded on
the AIM Market of the London Stock Exchange.
The address of the registered office is 7 Savoy Court, London,
England, WC2R 0EX. The principal activity of the Group is the
provision of digitally native technology services to clients within
the commercial, government and non-government organisation ("NGO")
sectors.
The interim financial information is unaudited.
2. Basis of preparation
The Group has not applied IAS 34 Interim Financial Reporting,
which is not mandatory for UK AIM listed companies, in the
preparation of this half-yearly report.
This consolidated interim financial information for the six
months ended 30 September 2021 does not, therefore, comply with all
the requirements of IAS 34 Interim financial reporting. The
consolidated interim financial information should be read in
conjunction with the annual financial statements of TPXimpact
Holdings plc (formerlyThe Panoply Holdings Plc) for the year ended
31 March 2021, which have been prepared in accordance with and in
conformity with UK adopted International Financial Reporting
Standards ("IFRS"). Last year's accounts was prepared under IFRSin
conformity with the Companies Act 2006 and the AIM rules for
Companies.
This consolidated interim financial information does not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31
March 2021 were approved by the Board of directors on 12 August
2021 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified and did not contain any
statement under sections 498 (2) or (3) of the Companies Act
2006.
The interim financial statements are presented in pound sterling
(GBP), which is the functional currency of the parent company.
The interim financial statements present comparative periods 6
months to 30 September 2020 and 12 months to 31 March 2021.
3. Basis of consolidation
These interim consolidated financial statements consolidate the
financial statements of the Company and its subsidiary undertakings
as at 30 September 2021. Subsidiaries are fully consolidated from
the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such
control may cease. The financial statements of the subsidiaries are
prepared for the same reporting period as the parent company, using
consistent accounting policies.
4. Accounting policies
The accounting policies used in the preparation of the interim
consolidated financial information for the six months ended 30
September 2021 are in accordance with the recognition and
measurement criteria of IFRS and are consistent with those which
were adopted in the annual statutory financial statements for the
year ended 31 March 2021.
For 30 September 2020, the Group restated the share premium
account, where amounts should have been recorded under a merger
reserve as required by merger relief under Companies Act, Section
612.
5. Business combinations
i. Nudge Digital Limited
On 30 June 2021, the Group acquired 100% of the issued share
capital and voting rights of Nudge Digital Limited (Nudge), a
company based in the United Kingdom. Nudge is a digital agency
specialising in user research, user experience, design and build
for healthcare, big pharma, highly regulated industries and
Government.
The Group has performed an initial review of Nudge's assets and
liabilities which have been included in this set of interim
statements. The Group is currently obtaining the information
necessary to finalise its valuation, therefore the finalised
valuation will be reported within its next published financial
statements.
The preliminary fair values of the identifiable intangible
assets have been determined provisionally as GBP1.4m and goodwill
of GBP3.3m. The goodwill that arose on the combination can be
attributed to the value of the workforce of Nudge which cannot be
recognised as an intangible asset. Goodwill has been provisionally
allocated to a cash-generating unit at 30 September 2021 and is
attributable to the Consulting segment. The amortisation of the
goodwill that arose from this business combination is not expected
to be deductible for tax purposes.
From the date of the acquisition to 30 September 2021, Nudge
contributed GBP1.3m and GBP0.7m to the Group's revenues and
adjusted EBITDA, respectively. Had the acquisition occurred on 1
April 2021, the Group's revenue for the period to 30 September 2021
would have been GBP2.2m higher and the Group's adjusted EBITDA for
the period would have been GBP1.0m higher.
6. Borrowings
The Group entered into a three year revolving credit facility
("RCF") with HSBC UK Bank Plc ("HSBC") on 11 June 2019, initially
for GBP5m. The RCF was extended in September 2020 to GBP7m and
again in February 2021 to GBP20m. Of which GBP13m has been drawn
down and GBP7m undrawn. Within the GBP20m facility, the Group can
draw up to GBP5m for working capital purposes with the remainder
set aside for acquisitions.
7. Earnings per share
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------------- ---------
Profit / (loss) attributable to
ordinary shareholders 278 (1,667) (2,229)
Basic earnings per share Number Number Number
------------------------------------- ----------- ----------- -----------
Weighted average number of ordinary
shares in issue 83,654,504 56,935,288 63,783,475
Basic earnings / (loss) per share 0.33p (2.93)p (3.50)p
Diluted earnings per share Number Number Number
------------------------------------- ----------- ----------- -----------
Weighted average number of ordinary
shares in issue used in basic
earnings per share calculation 83,654,504 56,935,288 63,783,475
Dilutive shares 1,863,157 - -
Diluted earnings / (loss) per
share 0.33p (2.93)p (3.50)p
8. Reconciliation to adjusted EBITDA
6 months to 6 months 12 months
30 September to 30 September to 31 March
2021 2020 2021
Unaudited Unaudited Audited
-------------- ------------------ -------------
GBP'000 GBP'000 GBP'000
-------------- ------------------ -------------
Adjusted EBITDA 5,348 2,875 7,101
-------------- ------------------ -------------
Amortisation of intangible
assets (2,553) (995) (2,509)
-------------- ------------------ -------------
Depreciation (295) (383) (835)
-------------- ------------------ -------------
Gain/(Loss) on fair
value movement contingent
consideration (668) (2,520) (4,260)
-------------- ------------------ -------------
Share-based payments (192) (150) (294)
-------------- ------------------ -------------
Costs directly attributable
to the business combination (350) (263) (496)
-------------- ------------------ -------------
Costs directly attributable
to business restructuring (80) - (250)
-------------- ------------------ -------------
Costs directly attributable
to investment in Open
Dialog (258) - -
-------------- ------------------ -------------
Operating profit / (loss) 952 (1,436) (1,543)
-------------- ------------------ -------------
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END
IR FFFLVLSLIVIL
(END) Dow Jones Newswires
December 01, 2021 02:00 ET (07:00 GMT)
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