TIDMTHRU
RNS Number : 8310E
Thruvision Group PLC
12 July 2021
12 July 2021
Thruvision Group plc
(" Thruvision " or the "Company")
Results for the Year ended 31 March 2021
Thruvision (AIM:THRU), the leading provider of "safe distance"
people-screening technology to the international security market,
announces results for the financial year ended 31 March 2021.
Headlines
-- Revenue of GBP6.7 million (2020: GBP8.0 million), with
operating loss before tax of GBP2.8 million (2020: GBP1.7
million);
-- Adjusted loss before tax* of GBP2.3 million (2020: GBP1.2
million), including GBP0.3 million FX loss (2020: GBP0.1
million FX gain);
-- Gross margin increased to 48% (2020: 47%) due to prudent
cost control, with overheads flat at GBP5.3 million;
-- Increasing focus on Profit Protection sector which grew
49%, with 16 new customers covering third-party logistics
providers (including FedEx, Clipper and CEVA Logistics)
and retailers (including ASOS, Asda and Fanatics) and,
since the period end, Boohoo;
-- Sales into Customs, Aviation and Surface Transport sectors
were significantly impacted by lockdowns and travel restrictions
resulting from the pandemic, most notably in Asia; and
-- Cash at 31 March 2021 of GBP7.3 million (31 March 2020:
GBP8.4 million).
* Adjusted loss before tax is defined as loss before tax
from continuing operations after adding back share-based
payments.
Commenting on the results, Colin Evans, Chief Executive, said "
As with many others, the pandemic presented us with a number of
challenges but our presence in multiple markets, combined with the
flexibility of colleagues and suppliers, gave us good levels of
resilience. We saw demand from our Profit Protection sector
strengthen as lock-down restrictions started easing in the spring
and we believe this continuing shift to online retail will sustain
our strong growth in this sector. The scale of opportunity in both
our Customs and Aviation sectors remains undiminished but we expect
each of these sectors to recover at different rates over the coming
months.
With differentiated products, a very competitive market position
and a strong cash balance, we expect to return to growth this year
and remain confident in our strategy, market drivers and long-term
opportunities."
For further information please
contact:
Thruvision Group plc +44 (0)1235 425 400
Tom Black, Executive Chairman
Colin Evans, Chief Executive
Investec Bank plc +44 (0)20 7597 5970
James Rudd / Sebastian Lawrence
/ Patrick Robb
FTI Consulting LLP +44 (0)20 3727 1000
Matt Dixon / Tom Blundell
About Thruvision
Addressing the urgent need for "safe distance" people security
screening in the COVID era, Thruvision is uniquely capable of
detecting metallic and non-metallic items including weapons,
explosives and contraband items that are hidden under clothing, at
distances between 3 and 10m. Using patented passive terahertz
technology, Thruvision completely removes the need for physical
"pat-downs" and has been vetted and approved by the US
Transportation Security Administration for surface transportation.
Operationally deployed in 20 countries around the world, Thruvision
is used for aviation security, retail supply chain loss prevention,
customs and border control, and public area security. The company
has offices near Oxford and Washington DC.
www.thruvision.com
Chairman's statement
Introduction
The past year has seen our business face significant challenges
due to the COVID-19 pandemic. The flexibility and support of our
people have been crucial to our ability to adapt to these
challenges and I am immensely grateful to each of them for their
continued commitment to Thruvision's development.
The Group had a mixed year. Despite the pandemic, we had a good
first half, but further lockdowns and travel restrictions in the
autumn and winter stifled any hopes for an immediate recovery in
sales to our Customs, Aviation and Surface Transport sectors. This
fed through into a weaker than expected second half meaning we
ended with full year revenues of GBP6.7 million. While our average
revenue per unit and gross margins strengthened slightly and
overheads were managed very tightly, the Group saw widening losses
for the year, exacerbated by a negative FX impact from the
strengthening of Sterling against the US Dollar.
Although overall revenues were lower, the impact was most
pronounced in our Asian markets, with the UK, US and Middle East
regions all recording modest improvements. Improvements in the UK
and, to some extent the US, reflect the rapid growth in online
retail which has accelerated across many economies during the
pandemic and has, in turn, led to a meaningful increase in the
size, number and scale of distribution centres worldwide to support
online sales models. As this fulfilment infrastructure has
increased, so too has the market opportunity for our Profit
Protection business.
Profit Protection
Our Profit Protection sector has been a beneficiary of this
growing market opportunity and revenues grew 49% during the year,
representing around one third of total revenues (2020: 20%). We
added 16 new customers and continued to deepen our relationships
with key existing customers. It has become apparent that Profit
Protection has the potential to drive further significant growth
for the Group as the market is fast-growing, comprises a broad
range of customers across many countries, and has security
requirements which Thruvision meets well.
Customs
Whilst one of our key customers, US Customs and Border
Protection, placed a material order towards the end of the first
half and we remain optimistic that those initial unit deployments
will be expanded, our Customs sector has been significantly
impacted by the pandemic. Asia has generated several Customs sales
in recent years, but these were not repeated last year due to
general travel restrictions and continued market uncertainty.
However, with the progression of vaccine rollouts and the gradual
lifting of various restrictions in some parts of the world, we are
now seeing renewed progress with several new international Customs
agency opportunities in Asia and the Middle East.
Aviation
The Aviation sector saw a near-total shutdown throughout the
year as travel restrictions significantly disrupted activity.
Whilst airlines and airport activity remains subdued, the formal
accreditation process of Thruvision for passenger screening by the
US Transportation Security Administration (TSA) started just after
the period end. Although this is a key strategic objective for our
business, this process is likely to take some time to come to a
conclusion. This, in addition to the continued uncertainties
surrounding the Aviation industry, means that the short-term
outlook in Aviation remains challenging. In the medium-term, we
remain confident in the strength of our product offering and in our
market positioning for when more normal trading conditions
resume.
Board changes
I am delighted to welcome Richard Amos to the Board as our new
Independent Director who will chair the Audit, Remuneration and
Nomination Committees. Richard has a wealth of public company
experience gained at Wilmington and Anite amongst others and he is
already making a valuable contribution to our Board discussions.
Paul Taylor will step down at the AGM in September after nine years
on the Board and I am hugely grateful for his enthusiasm, insight
and support over that period. We wish Paul well for the future. As
we expand further, we will require more diverse views around the
Board table and we expect to strengthen the Board in the coming
year with the addition of a further independent Director.
Outlook
Whilst the pandemic has undoubtedly provided major challenges to
our business, it has reinforced the importance of operating in
diversified market sectors across multiple regions. A strong
performance in our Profit Protection sector partially offset weaker
performance in other sectors impacted by COVID-19 disruption. With
this strength in demand in Profit Protection expected to continue,
we have increased our strategic focus by further investing in our
sales team, and we expect good short-term growth here. With
vaccination efforts now taking effect in some of our markets, we
are seeing early signs of recovery in our Customs sector, but
expect Aviation activity to pick up more slowly.
Focussing on the fast-growing Profit Protection sector in
addition to Customs and Aviation provides us with a good mix of
future opportunities. With differentiated products, a very
competitive market position and a strong cash balance, we expect to
return to growth this year and remain confident in our strategy,
market drivers and long-term opportunities.
Strategic update
Thruvision addresses the growing international need to safely,
quickly and comprehensively security-screen individuals for
weapons, contraband or other illicit non-metallic items that might
be concealed in their clothing. The two most widely deployed
existing technologies, walk-through metal detectors and airport
body scanners, do not meet this need. Critically, both these
technologies require close-proximity physical searches to resolve
alarms, and the COVID-19 pandemic is forcing security users
globally to re-evaluate the safety implications of such 'pat down'
searches.
Thruvision comprehensively solves this problem. By allowing a
security guard to see concealed items of any material, as small as
3cm by 3cm, and from a safe distance of 3 metres, Thruvision
completely removes the need for physical search. This combination
of safe distance, contactless operation with reliable,
comprehensive detection is unique to Thruvision.
The pandemic has caused some significant shifts in the relative
market opportunities across our sectors and these are influencing
our strategy. These changes are summarised as follows:
-- Profit Protection - as a result of the pandemic, we have seen
strong interest and a growing uptake from a mix of large
international and online, high-growth businesses in this market.
This has been driven by significant growth in our customers' online
businesses and a rapid expansion in their distribution centre and
home delivery provision which they are increasingly outsourcing to
third-party logistics providers. COVID-19 safety rules prevented
standard staff security procedures using metal detecting wands,
resulting in an increase in theft of largely non-metallic items by
employees. Thruvision can demonstrate a clear business case based
on reducing these thefts as well as reducing manned guarding costs
and increasing the speed of exit for employees. Our solution is now
well established across a number of verticals including fashion,
healthcare, grocery, electronics and supporting third-party
logistics providers.
-- Customs - this is a well-established market for Thruvision,
where we screen travellers at border checkpoints for predominantly
non-metallic, prohibited items such as cash and drugs. We saw a
significant slowdown as normal operation activities in Customs
agencies were clearly disrupted by the pandemic. We are now seeing
early signs of a gradual return to more normal activity levels as
vaccination efforts take effect in certain markets.
-- Aviation - in the pre-pandemic period, we were making good
progress towards gaining accreditation of our Checkpoint Camera
(CPC) product for the highly-regulated airport passenger checkpoint
screening market. However, the global aviation market has seen a
near-total shutdown during the pandemic and this situation is
likely to recover at a slower pace compared to our other sectors.
After several delays, we have now started the formal accreditation
process with the US Transportation Security Administration but
remain in the early stages of this process. Should we be
successful, this will open the door to the international aviation
security market to the Group.
-- Entrance Protection - this involves screening for weapons at
entrances to a variety of buildings. While this market remains
generally subdued given the pandemic, we have seen interest from
our Profit Protection customer base in the US. This is driven by
the continuing levels of mass casualty firearm attacks, several of
which are now occurring in the workplace. We are adding 'workplace
security' to our Profit Protection offering in the US to provide
solutions to these issues for our customers.
-- Surface Transport - this involves screening for suicide vests
and automatic weapons at railways, subways and airport concourses.
Demand from Asia, historically our strongest region, was
significantly impacted by the lockdown regulations caused by the
pandemic. However, as well as the aviation accreditation process
referred to above, TSA's Surface Division is now testing our
recently-launched Surface Transport products, based on our latest
high performance 16-channel hardware, for further use in this
market. We expect to be well positioned to provide these solutions
as more normal trading conditions resume.
As a result of these changes in market dynamics, we have shifted
our short-term focus to accelerating our growth in the Profit
Protection sector as we believe this now presents a very sizeable
market opportunity for the Group over the next five years. We will
continue to react quickly to capitalise on expected increases in
activity levels in our other, more Government-led sectors with
particular focus on our market position with US Federal Government
customers.
Business review
Sales
In terms of units shipped, our sales performance in the year was
disappointing, with a total of 84 units shipped (2020: 114). The
pandemic has caused material changes in the purchasing dynamics of
our various markets, with interest levels and traction increasing
rapidly in Profit Protection, and our other, predominantly
government-based sectors, seeing material slowdowns, especially in
Asia.
Profit Protection
Sales performance in our Profit Protection sector was strong,
driven by the online shift in consumer behaviour, which has been
accelerated by the pandemic. Our revenues here grew by 49% relative
to last year, and now represent around one third of revenues (2020:
20%).
We added 16 new customers in the period, with 12 of these being
in the second half. Major third-party logistics providers including
CEVA Logistics, Unipart, DPD and Clipper ordered from us for the
first time, as did high-growth online retailers including ASOS and,
since the period end, Boohoo. We also continued to sign more
traditional retailers including Asda and, since the period end,
Tesco, and saw further ordering by existing customers including The
Hut Group, JD Sports and Next. We secured our first major customer
wins in the US with FedEx and online sports apparel retailer,
Fanatics, and saw orders coming from Eire, the Netherlands and
Germany. Given our traction with major retailers and their
logistics providers, we have continued to build our sales force in
Europe and the US, with the addition of 4 new heads.
As important as their number is the scale and growth rates of
some of the new customers we have added. Organisations like FedEx
and CEVA are already very large and well-established, while
businesses like ASOS, Clipper, The Hut Group and Fanatics are
growing very quickly. Having achieved initial sales to these
organisations, we are now strengthening our account management and
post-sales support capabilities to ensure that we become the de
facto standard for employee security screening. We foresee a
combination of new unit sales growth and, in due course, system
upgrade sales as our customers continue to grow.
Responding to market feedback, we now offer a pre-sales business
case development service which, coupled with the ability to offer
both capex and opex purchasing options, has helped shorten sales
cycles and overcome initial concerns about return on investment. We
are also benefitting from our membership of a growing number of
organisations in the Profit Protection arena including the British
Retail Crime Solutions, the Loss Prevention Foundation and Loss
Prevention Research Centre in the US, and the International Supply
Chain Protection Organisation. A feature of all these organisations
is best practice sharing and collaboration which helps us reach a
much broader and highly relevant audience.
Customs
Historically, this has been our strongest performing sector.
Last year, our sales performance was underpinned by a single large
order from US Customs and Border Protection in H1 which was already
in process prior to the first lockdowns in the spring of 2020.
Separately, and through a partner, we also sold units to support a
significant pilot programme in the Gulf in H1. Beyond that, a
number of other opportunities, particularly in Asia, were heavily
delayed through H2 and we booked no sales in this sector in that
period.
We are now seeing activity levels increasing again, with
deployments in the US developing well, new pilot programmes
underway in the Gulf, and progress being made again in Asia. We
believe we will see this sector pick up as the various restrictions
still in operation around the world start to ease.
Aviation
We made sales to both Seattle and La Guardia airports at the
start of the pandemic and were pleased to see that these security
lanes, used for employee screening, remained operational during the
crisis. However, the broader global aviation sector has seen a very
substantial reduction due to the pandemic and we have seen
extremely limited activity levels from the airport operators and
airlines with whom we had been making good progress.
Looking forward, market conditions are expected to remain
subdued and, in the short-term, we are concentrating on making
progress on the formal TSA accreditation process in order to access
the highly regulated passenger screening market.
Entrance Protection and Surface Transport
Entrance Protection and Surface Transport have both been
significantly impacted by the pandemic, with particular disruption
in Asian markets. Looking forward, with our newest high-performance
products now being tested by TSA Surface Division, we expect to see
renewed interest in our solutions. This is particularly the case in
the US and the Gulf with our ability to detect weapons at a
distance of 3 metres or more.
Routes to market
Where we have a geographic presence, we continue to sell
directly to end customers. In addition to the UK and US, we added
staff in the Netherlands in 2020, and in Poland in summer 2021.
Both of these locations are key distribution hubs for Western and
Eastern Europe respectively and are seeing very significant growth
in the number of distribution centres. Our US team is now fully
staffed and able to cover all of our market sectors.
To broaden our market access, we are looking to the distribution
centre automation market for potential new routes to market and
have redoubled our efforts to partner with a range of security
integrator and security guarding companies who are looking to
deliver better value for money to their end customers.
At the same time, a combination of ever-increasing market
awareness and restrictions on travel over the last year have
encouraged us to open up a number of promising indirect sales
channels. We have a growing list of Value-Added Resellers across
Europe covering the Iberian Peninsula, Germany and Benelux, as well
as country partners in Saudi Arabia, UAE, Qatar, Israel, Australia,
South Korea, Japan and the Philippines. From our US office, we also
manage a number of partners in Canada and Latin America. We have
made good use of video conferencing technology to train these
partners and support them in their early interactions with end
customers.
New product development
Building on the success of the TAC8 product we launched in
summer 2018, we expanded our product range to nine during the year.
Based on the same hardware platform but configured in 4-, 8- and
16-channel variants, we now offer specific products for each of our
markets as follows:
-- Loss Prevention Camera (LPC) for the Profit Protection market
-- Tactical Awareness Camera (TAC) for the Customs market
-- Checkpoint Camera (CPC) for the Aviation market
-- High Throughput Camera (HTC) for the Entrance Security and Surface Transport markets
Each product family is distinguished by its software features
that provide optimised performance for its specific target market.
Differing channel counts provide varying detection price /
performance options - for example an LPC16 provides significantly
better detection performance than an LPC4 but at a much higher
price point.
We continue to invest in expanding our AI-based image processing
capability. This already forms part of our CPC camera range but,
with the increased hardware performance we are now offering, we
believe further improvements in detection performance can be made
more effectively in software. We continue to improve usability of
our systems by actively encouraging feedback from our users and
adding features to our software. We have recruited a very
experienced new VP Software to lead this effort.
Competition
There has been little change in the competitive landscape over
the last year. In Profit Protection, we are mainly competing with
lower cost security guards using metal detectors. As well as being
ineffective, this approach is also heavily compromised by COVID-19
safety considerations. More widely, we continue to compete directly
with airport body scanners, although their use has been limited by
the pandemic (due to their need for close-contact alarm
resolution), and in certain Profit Protection accounts, we have
displaced their use. Where we have encountered some smaller,
early-stage technology companies we have been successful in all of
the competitive testing we have undertaken. Furthermore, none of
these have yet entered any form of formal TSA testing. We maintain
a watching brief.
Overall, we remain very confident that we will be able to
maintain the market leading position we have established for 'safe
distance' people security screening technology. The impact of the
COVID-19 pandemic on social distancing and awareness has
accelerated our underlying market drivers in this area.
Manufacturing and support
Our manufacturing capability and supply chain remains highly
effective despite the pandemic and we are confident that, with our
outsourced US facility, we are capable of meeting the order volumes
we are expecting and can scale production further as needed. Our
post-sales support has now matured and been extended out to
partners. We remain confident about the reliability of our
equipment and are starting to manage product upgrade orders for a
number of our longer standing customers.
IP protection
We continue to invest in the research and development of the
Thruvision product range and, where appropriate, suitable patent
protection is put in place. During the year our two most recent
patent applications, submitted in 2019, continued to be assessed in
accordance with the normal global patent application process. In
addition, the Thruvision Trademark was registered in relevant
jurisdictions.
People
We increased headcount from 37 to 42 staff through the year.
This increase was again predominantly in Sales and Sales Support
and focused exclusively on the Profit Protection sector. We
successfully complied with all necessary government guidelines in
the UK and US regarding COVID-19 safety at work.
Financial review
Summary
For the year ended 31 March 2021, revenues reduced by 16% to
GBP6.7 million (2020: GBP8.0 million) which resulted in an
operating loss of GBP2.8 million (2020 loss: GBP1.7 million).
The Directors believe that adjusted loss before tax is currently
an important measure of the performance of the business. The Group
recorded an adjusted loss of GBP2.3 million (2020: GBP1.2 million).
This was arrived at as follows:
Adjusted loss:
2021 2020
GBP'000 GBP'000
Loss before tax from
continuing operations (2,756) (1,502)
----------------------- -------- --------
Share-based payments 409 297
----------------------- -------- --------
Adjusted loss before
tax for the year from
continuing operations (2,347) (1,205)
-------- --------
Further details on the above are provided in note 4
New product sales of Thruvision units resulted in 84 units
delivered in 2021 (2020: 114). Average revenue per unit increased
to GBP77k (2020: GBP68k) as the sales mix shifted almost completely
to our new higher specification products. This product range, which
we started introducing in 2019, is now firmly established in the
market, particularly in Profit Protection. Overall Gross Margin
grew modestly to 48% (2020: 47%), due to more profitable
customer-funded R&D contracts.
A focus on keeping overheads to a minimum generated savings that
were used to partially offset our investment in the Sales &
Marketing resource required to drive growth. Overall, overheads
remained flat at GBP5.3 million (2020: GBP5.3 million). However,
movement in the USD/GBP rate caused an adverse year on year
movement of GBP417k (GBP329k FX losses in FY21 compared with GBP88k
net gains in FY20), which is a key reason for Administration costs,
and hence our overall loss before tax, increasing.
Our overall headcount increased by five to 42 as we welcomed new
employees predominantly to strengthen our Sales team.
The cash balance at the year-end was GBP7.3 million (2020:
GBP8.4 million), with the reduction being slightly better than our
losses might suggest, largely as a result of good control over
administrative costs spend and cash collections from customers.
Key Performance Indicators ('KPIs')
We consider the following to be our KPIs which track the trading
performance and position of the business.
KPIs
2021 2020
GBP'000 GBP'000
Revenue 6,700 8,002
------------------------ -------- --------
Number of units shipped 84 114
------------------------ -------- --------
Average revenue per
unit 77 68
------------------------ -------- --------
Gross Profit 3,214 3,760
------------------------ -------- --------
Gross Margin 48% 47%
------------------------ -------- --------
Overheads* (5,280) (5,280)
------------------------ -------- --------
Adjusted operating loss
before tax (2,347) (1,205)
------------------------ -------- --------
Number of employees
at 31 March 2021 42 37
------------------------ -------- --------
*Excludes Share Option
charges & FX
-------- --------
Revenue
Within revenues of GBP6.7 million (2020: GBP8.0 million), unit
sales contributed GBP6.5 million (2020: GBP7.8 million) and
development revenue was GBP0.2 million (2020: GBP0.2 million).
As explained in the Business review, the reduction in revenues
against the prior year was due to weakness in our Asian business
across Customs and Surface Transport, although this was partially
offset by strong growth in Profit Protection in the second half of
the year.
2021 2020
Revenue GBP'000 GBP'000
Units 6,502 7,765
----------------------- -------- --------
Development 198 237
-------- --------
Total 6,700 8,002
-------- --------
2021 2020
Revenue by Geography GBP'000 GBP'000
-------- --------
UK and Europe 1,473 1,234
----------------------- -------- --------
Americas 4,501 4,311
----------------------- -------- --------
Asia-Pacific 140 2,430
----------------------- -------- --------
Middle East and Africa 586 27
-------- --------
Total 6,700 8,002
-------- --------
2021 2020
Revenue by Sector GBP'000 GBP'000
-------- --------
Profit Protection 2,047 1,371
Customs 3,316 4,098
Aviation 193 170
Entrances & Surface
Transport 128 1,560
Support & Development 1,016 803
-------- --------
Total 6,700 8,002
-------- --------
Gross Profit
Gross Profit generated in the period was GBP3.2 million (2020:
GBP3.8 million), with Gross Margin increasing to 48% (2020: 47%), a
modest increase as a result of more profitable customer-funded
R&D.
2021 2020
Gross Margin GBP'000 GBP'000
Unit Revenue 6,502 7,765
------------------------- -------- --------
Unit Gross Profit 3,137 3,755
-------- --------
Gross Margin % 48% 48%
------------------------- -------- --------
Development Revenue 198 237
------------------------- -------- --------
Development Gross Profit 77 6
-------- --------
Gross Margin % 39% 2%
------------------------- -------- --------
Overall Revenue 6,700 8,002
------------------------- -------- --------
Overall Gross Profit 3,214 3,761
-------- --------
Gross Margin % 48% 47%
-------- --------
Overheads
Overheads were flat at GBP5.3 million (2020: GBP5.3 million)
primarily due to reducing discretionary spend such as travel and
subsistence, offset by a focus on sales and targeted marketing
investment as well as higher depreciation costs. Overall, we
continue to focus on closely managing our overhead base and foresee
a limited increase in travel costs over the next year given the new
ways of working we have successfully established.
Engineering (manufacturing and R&D) costs decreased by
GBP0.1 million. Although we recruited another R&D head into the
business to maintain our mid-term programme, we were able to reduce
the third-party R&D spend necessary to complete the launch of
our new product range. With the addition of our own VP Software to
drive in-house AI-based image processing work, we expect R&D
spend to increase modestly in the coming year.
Sales & Marketing expenditure increased by GBP0.2 million to
invest in our strategically important US and Profit Protection
markets. We added sales and pre-sales heads in the US and
Netherlands in order to capitalise on our 'flagship' customer
deployments in these regions.
Property and administration costs reduced in the year due to
closing our Guildford office and closely managing our overhead
base. Depreciation increased as we added more demonstration units
to support our growing sales team as well as an increase in IFRS 16
lease costs. Management costs fell given no international travel
was possible and PLC costs stayed constant.
2021 2020
Overheads GBP'000 GBP'000
Engineering 1,403 1,510
-------------------------------- -------- --------
Sales & Marketing 1,718 1,557
-------------------------------- -------- --------
Property and administration 469 492
-------------------------------- -------- --------
Management 642 738
-------------------------------- -------- --------
PLC costs 532 533
-------------------------------- -------- --------
Depreciation and amortisation 518 450
-------- --------
Total Overheads 5,282 5,280
-------- --------
Share-based payments 409 297
-------------------------------- -------- --------
Foreign exchange losses/(gains) 329 (88)
-------- --------
Total Administration
costs 6,020 5,489
-------- --------
Looking forward, we expect to see further investment,
principally in Sales & Marketing, but at a rate below the
headline anticipated growth rate of the business. We do not expect
to materially increase management and administration or PLC costs
in the near-term.
Adjusted Operating Loss before tax
Adjusted operating loss from operations before tax and
share-based payments but including depreciation, Foreign exchange
('FX') and interest amounted to GBP2.3 million (2020 loss: GBP1.2
million).
Discontinued profit/loss
Additional deferred consideration, in excess of expectations
last year, was received in the year totalling GBP63k (2020:
GBP265k). Other discontinued costs relate to the closure of our
Guildford office as well as professional advisor costs in relation
to the discontinued part of the business.
Taxation
As a result of brought-forward tax losses we do not expect to
pay the full rate of UK corporation tax in the next few financial
years. The Income Statement tax credit for the year of GBP266k
(2020: GBP223k) relates to the expected R&D tax credit
reclaim.
At 31 March 2021, the Group had unutilised tax losses carried
forward of approximately GBP13.0 million (2020: GBP11.5 million).
Given the varying degrees of uncertainty as to the timescale of
utilisation of these losses, the Group has not recognised GBP13.0
million (2020: GBP11.5 million) of potential deferred tax assets
associated with these losses. At 31 March 2021, the Group's net
deferred tax liability stood at GBPnil (2020: GBPnil).
Cash
The Group cash and cash equivalents at 31 March 2021 were GBP7.3
million (2020: GBP8.4 million).
The overall cash outflow of GBP1.1 million for the year ended 31
March 2021 was as a result of the operating loss of the business,
offset by careful working capital management. Movements in working
capital included a reduction in trade and other receivables of
GBP1.0 million, as well as an increase in deferred revenue of
GBP0.8 million which were offset by an increase in stock of GBP0.7
million and a decrease in creditors of GBP0.1 million to give an
overall release of working capital of GBP0.9 million into cash in
the year.
Deferred Revenue
Deferred revenue increased from GBP0.4 million as at 31 March
2020 to GBP1.3 million at 31 March 2021. This was as a result of
two large US governmental support contracts invoiced in the year
where we are providing a new enhanced level of support
offering.
Currency impact
The Group incurred foreign currency exchange losses included
within administration costs during the period of GBP0.3 million
(2020: GBP0.1 million gain), principally due to the USD weakening
against GBP during the current year. The Group recorded no other FX
gains or losses in 2021 (2020: GBP0.2 million gain recognised
within Finance Income).
Consolidated income statement
for the year ended 31 March 2021
Year ended Year ended
31 March 31 March
2021 2020
Notes GBP'000 GBP'000
Continuing operations
Revenue 2 6,700 8,002
Cost of sales (3,486) (4,242)
------------------------------------------------------ ----- ---------- ----------
Gross profit 3,214 3,760
Administration costs (6,020) (5,489)
Other income 49 -
------------------------------------------------------ ----- ---------- ----------
Operating loss 3 (2,757) (1,729)
Finance income 5 22 253
Finance costs (21) (26)
------------------------------------------------------ ----- ---------- ----------
Loss before tax (2,756) (1,502)
Income tax 266 223
------------------------------------------------------ ----- ---------- ----------
Loss for the year from continuing operations (2,490) (1,279)
------------------------------------------------------ ----- ---------- ----------
Discontinued operations
Profit from discontinued operations after tax 9 2 189
------------------------------------------------------ ----- ---------- ----------
Loss for the year (2,488) (1,090)
------------------------------------------------------ ----- ---------- ----------
Adjusted loss: 4
Loss before tax from continuing operations (2,756) (1,502)
Share-based payment 4 409 297
Adjusted loss before tax for the year from continuing
operations (2,347) (1,205)
------------------------------------------------------ ----- ---------- ----------
Loss per share - continuing operations
Loss per share - basic 6 (1.71p) (0.88p)
Loss per share - diluted 6 (1.71p) (0.88p)
Loss per share - continuing and discontinued
operations
Loss per share - basic 6 (1.71p) (0.75p)
Loss per share - diluted 6 (1.71p) (0.75p)
------------------------------------------------------ ----- ---------- ----------
Consolidated statement of comprehensive income
for the year ended 31 March 2021
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
------------------------------------------------------------ ---------- ----------
Loss for the year from continuing operations (2,490) (1,279)
Profit for the year from discontinued operations 2 189
------------------------------------------------------------ ---------- ----------
Loss for the year attributable to owners of the parent (2,488) (1,090)
------------------------------------------------------------ ---------- ----------
Other comprehensive income/(loss) from continuing
operations
------------------------------------------------------------ ---------- ----------
Exchange differences on retranslation of foreign
operations - continuing (48) 101
------------------------------------------------------------ ---------- ----------
Net other comprehensive (expense)/income to be reclassified
to profit or loss in subsequent periods (48) 101
------------------------------------------------------------ ---------- ----------
Total comprehensive loss attributable to owners of
the parent (2,536) (989)
------------------------------------------------------------ ---------- ----------
Consolidated statement of financial position
at 31 March 2021
31 March 31 March
2021 2020
Notes GBP'000 GBP'000
Assets
Non current assets
Property, plant and equipment 1,103 1,238
Intangible assets 48 62
--------------------------------------------- ---------- ----------
1,151 1,300
-------------------------------------------- ---------- ----------
Current assets
Inventories 4,419 3,671
Trade and other receivables 1,442 2,221
Derivative financial instrument - 203
Current tax recoverable 378 296
Cash and cash equivalents 7,268 8,431
--------------------------------------------- ---------- ----------
13,507 14,822
-------------------------------------------- ---------- ----------
Total assets 14,658 16,122
--------------------------------------------- ---------- ----------
Equity and liabilities
Attributable to owners of the parent
Equity share capital 1,458 1,455
Share premium 47 -
Capital redemption reserve 163 163
Translation reserve 67 115
Retained earnings 9,578 11,652
--------------------------------------------- ---------- ----------
Total equity 11,313 13,385
--------------------------------------------- ---------- ----------
Non current liabilities
Other payables 643 305
Provisions 38 38
681 343
-------------------------------------------- ---------- ----------
Current liabilities
Trade and other payables 2,489 2,394
Provisions 175 -
--------------------------------------------- ---------- ----------
2,664 2,394
-------------------------------------------- ---------- ----------
Total liabilities 3,345 2,737
--------------------------------------------- ---------- ----------
Total equity and liabilities 14,658 16,122
--------------------------------------------- ---------- ----------
Consolidated statement of changes in equity
for the year ended 31 March 2021
Ordinary Share Capital
share premium redemption Translation Retained Total
capital account reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- ----------- ----------- --------- --------
At 31 March 2019 1,618 - - 14 12,445 14,077
------------------------- -------- -------- ----------- ----------- --------- --------
Cancellation of deferred
shares (163) - 163 - - -
Share-based payment
credit - - - - 297 297
------------------------- -------- -------- ----------- ----------- --------- --------
Transactions with
Shareholders (163) - 163 - 297 297
------------------------- -------- -------- ----------- ----------- --------- --------
Loss for the year - - - - (1,090) (1,090)
Other comprehensive
gain - - - 101 - 101
------------------------- -------- -------- ----------- ----------- --------- --------
Total comprehensive
gain/(loss) - - - 101 (1,090) (989)
------------------------- -------- -------- ----------- ----------- --------- --------
At 31 March 2020 1,455 - 163 115 11,652 13,385
------------------------- -------- -------- ----------- ----------- --------- --------
Shares issued 3 47 - - - 50
Share-based payment
credit - - - - 414 414
------------------------- -------- -------- ----------- ----------- --------- --------
Transactions with
Shareholders 3 47 - - 414 464
------------------------- -------- -------- ----------- ----------- --------- --------
Loss for the year - - - - (2,488) (2,488)
------------------------- -------- -------- ----------- ----------- --------- --------
Other comprehensive
(loss) - - - (48) - (48)
------------------------- -------- -------- ----------- ----------- --------- --------
Total comprehensive
(loss) - - - (48) (2,488) (2,536)
------------------------- -------- -------- ----------- ----------- --------- --------
At 31 March 2021 1,458 47 163 67 9,578 11,313
------------------------- -------- -------- ----------- ----------- --------- --------
Consolidated statement of cash flows
for the year ended 31 March 2021
Year ended Year ended
31 March 31 March
2021 2020
Note GBP'000 GBP'000
---------------------------------------------------- ---- ---------- ----------
Operating activities
Loss before tax from continuing operations (2,756) (1,502)
Profit before tax from discontinued operations 2 189
---------------------------------------------------- ---- ---------- ----------
Loss before tax (2,754) (1,313)
---------------------------------------------------- ---- ---------- ----------
Non-cash adjustment to reconcile loss before
tax to net cash flows
Depreciation of property, plant and equipment 504 444
Amortisation of intangible assets 14 7
Share-based payment transaction expense 409 297
Unrealised gains on foreign exchange 5 48
Disposal of fixed assets 103 -
Finance income 5 (22) (50)
Finance costs 21 26
Working capital adjustments:
Decrease/(increase) in trade and other receivables 956 (21)
Increase in inventories (748) (322)
Increase/(decrease) in trade and other payables 24 (123)
Increase in provisions (175) -
Increase in deferred revenue 891 185
Cash utilised in operations (772) (780)
Net tax receipts 179 56
---------------------------------------------------- ---- ---------- ----------
Net cash flow from operating activities (593) (724)
---------------------------------------------------- ---- ---------- ----------
Investing activities
Purchase of property, plant & equipment (491) (340)
Expenditure on intangible assets - (62)
Disposal of fixed assets 20 -
Interest received 22 50
Deferred consideration from disposal of Video
Business 8 63 265
---------------------------------------------------- ---- ---------- ----------
Net cash flow from investing activities (386) (87)
---------------------------------------------------- ---- ---------- ----------
Financing activities
---------------------------------------------------- ---- ---------- ----------
Proceeds from issue of shares 50 -
Leasing obligation repayments (186) (186)
Net cash flow from financing activities (136) (186)
Net decrease in cash and cash equivalents (1,115) (997)
Cash and cash equivalents at the beginning of
the year 8,431 9,375
Effect of foreign exchange rate changes on cash
and cash equivalents (48) 53
Cash and cash equivalents at end of year 7,268 8,431
---------------------------------------------------- ---- ---------- ----------
Notes to the financial statements
1. Accounting policies
Basis of preparation
The nancial information of the Group set out above does not
constitute statutory accounts for the purposes of Section 435 of
the Companies Act 2006. The nancial information for the year ended
31 March 2021 has been extracted from the Group's audited nancial
statements which were approved by the Board of Directors on 9 July
2021. The accounts will be posted to shareholders on or before 30
July 2021 and subsequently filed at Companies House.
The nancial information for the year ended 31 March 2021 has
been extracted from the Group's nancial statements for that period.
The report of the auditor on the 2021 nancial statements was
unquali ed, did not include any references to any matters to which
the auditors drew attention by way of emphasis without qualifying
their report and did not contain a statement under Section 498(2)
or Section 498(3) of the Companies Act 2006.
Whilst the nancial information included in this preliminary
announcement has been prepared in accordance with International
Accounting Standards ("IASs") in conformity with the requirements
of the Companies Act 2006, the International Financial Reporting
Interpretations Committee ("IFRIC"), interpretations issued by the
International Accounting Standards Boards ("IASB") that are
effective or issued and adopted as at the time of preparing these
financial statements, and in accordance with the provisions of the
Companies Act 2006 that are relevant to companies that report under
IFRSs, this announcement does not itself contain su cient
information to comply with those IFRSs. This nancial information
has been prepared in accordance with the accounting policies set
out in the 2021 Report and Accounts and updated for new standards
adopted in the current year.
Items included in the nancial information of each of the Group's
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
The consolidated nancial information is presented in UK sterling
(GBP) rounded to the nearest thousands (GBP'000), unless otherwise
stated, which is the Group's presentational currency.
Thruvision Group plc ('The Company') is a public limited company
incorporated and domiciled in England and Wales and whose shares
are quoted on AIM, a market operated by the London Stock
Exchange.
Going concern
The Group's loss before tax from continuing operations for the
period was GBP2.8 million (2020: GBP1.5 million). As at 31 March
2021 the Group had net current assets of GBP10.8 million (31 March
2020: GBP12.3 million) and net cash reserves of GBP7.3 million (31
March 2020: GBP8.4 million).
The Board has reviewed various cash flow forecast scenarios from
1 June 2021 to 31 July 2022 all of which show a positive cash
position and no need for the Group to take on any debt. In addition
to this a forecast was produced in which the Group made:
-- sales being materially lower than for the past 3 financial
years,
-- stock purchases and operating expenditure reduced to
an extent.
This forecast showed the Group would have over GBP2m of cash at
the end of July 2022.
Further forecasts were also produced which showed a materially
higher level of cash as shown in the above scenario.
The forecasts and projections prepared take into account the
potential impact that the Covid-19 pandemic may continue to impact
the Group over the next twelve months and beyond and show that the
Group will be able to operate within the level of current funding
resources. The Directors therefore believe there is sufficient cash
available to the Group to manage through these requirements.
As with all businesses, there are particular times of the year
where the Group's working capital requirements are at their peak.
The Group is well placed to manage business risk effectively and
the Board reviews the Group's performance against budgets and
forecasts on a regular basis to ensure action is taken where
needed.
The Directors therefore are satisfied that the Group has
adequate resources to continue operating for a period of at least
12 months from the approval of these accounts. For this reason,
they have adopted the going concern basis in preparing the
financial statements.
2. Segmental information
The business is run as one division although we sell our
products into a number of sectors with differing needs as disclosed
in the Finance Review. The directors do not split the business into
segments in order to internally analyse the business performance
and as a result the results of the business are only presented
below as continuing and discontinued. As the discontinued results
are not material to the business results this year this is not
shown below and note 8 includes the detail of discontinued
activities.
The directors believe that allocating overheads by department
provides a suitable level of business insight. The overhead
department cost centres comprise of:
-- Engineering (manufacturing and R&D)
-- Sales and Marketing
-- Property and administration
-- Management
-- Plc costs
with the split of costs as shown in the Strategic report.
Following its disposal on 31 October 2017 the Video Business has
been reported as a discontinued operation. The profit disclosed
this year within discontinued operations includes further amounts
due on deferred consideration as part of the Share Purchase
Agreement on the sale of the Video Business. Further details are
provided in note 8.
In accordance with IFRS 8, the Group has derived the information
for its operating segments using the information used by the Chief
Operating Decision Maker and supplemented this with additional
analysis to assist readers of the Annual Report to better
understand the impact of the Group's current trading performance.
The Group has identified the Board of Directors as the Chief
Operating Decision Maker as it is responsible for the allocation of
resources to operating segments and assessing their
performance.
Analysis of revenue by customer
There has been one (2020: five) individually material customers
(comprising over 10% of total revenue) in the year. These customers
individually represented GBP3,094k of revenue for the year (2020:
GBP2,227k, GBP1,397k, GBP1,359k, GBP965k and GBP897k).
Other segment information
The following tables provides disclosure of the Group's revenue
analysed by geographical market based on the location of the
customer.
The Group's Revenue by geographical area is detailed below:
2021 2020
GBP'000 GBP'000
--------------------- -------- --------
UK 1,045 1,165
Americas 4,501 4,311
Asia-Pacific 140 2,430
Europe 428 69
Middle East & Africa 586 27
6,700 8,002
--------------------- -------- --------
The Group's Revenue by type is detailed below:
2021 2020
GBP'000 GBP'000
------------------------------------------------- -------- --------
Revenue recognised at point of delivery 5,864 7,412
Revenue recognised over time - Extended warranty
and support revenue 836 590
6,700 8,002
------------------------------------------------- -------- --------
The Group's non-current assets by geography are detailed
below:
2021 2020
GBP'000 GBP'000
------------------------- -------- --------
United Kingdom 1,001 1,127
United States of America 150 173
------------------------- -------- --------
1,151 1,300
------------------------- -------- --------
3. Group operating loss
The Group operating loss attributable to continuing operations
is stated after charging/(crediting):
2021 2020
GBP'000 GBP'000
------------------------------------------------------- -------- --------
Research and development costs 577 549
Expected credit loss expense - -
Depreciation of property, plant and equipment 504 444
Amortisation of intangible assets initially recognised
on acquisition 14 7
Exchange losses/(gains) 329 (88)
------------------------------------------------------- -------- --------
Auditors' remuneration
The following table shows an analysis of all fees payable to
Grant Thornton UK LLP, the Group's auditors:
2021 2020
GBP'000 GBP'000
---------------------------------------------- -------- --------
Audit services
Fees payable to the Company's auditor for the
audit of the financial statements 38 37
The audit of the Company's subsidiaries 20 20
---------------------------------------------- -------- --------
58 57
---------------------------------------------- -------- --------
Non-audit services
Tax advisory services 13 19
Other non-audit services - 7
---------------------------------------------- -------- --------
13 26
---------------------------------------------- -------- --------
Fees relate to all activities undertaken by Grant Thornton UK
LLP (2020: Grant Thornton UK LLP) in the period, covering
continuing and discontinued operations.
4. Adjusted loss before tax
An adjusted loss before tax measure has been presented as the
Directors believe that this is a better measure of the Group's
underlying performance. Adjusted loss is not defined under IFRS and
has been shown as the Directors consider this to be helpful for a
better understanding of the performance of the Group's underlying
business. It may not be comparable with similarly titled
measurements reported by other companies and is not intended to be
a substitute for, or superior to, IFRS measures of profit. The net
adjustments to loss before tax from continuing operations are
summarised below:
2021 2020
GBP'000 GBP'000
------------------------ -------- --------
Share based payment (i) 409 297
Total adjustments 409 297
------------------------ -------- --------
(i) The performance condition associated with certain LTIP
awards are subject to a non-market based performance measure.
Accordingly, should these LTIP awards fail to vest, the
share based payment charge will be added back to the income
statement. To date the majority of historic LTIP awards
have failed to vest. The inclusion provides consistency
over time allowing a better understanding of the financial
position of the Group.
5. Finance income
2021 2020
GBP'000 GBP'000
------------------------------------------------ -------- --------
Gain on forward contract measured at fair value
through income statement - 203
Bank interest receivable 19 50
Finance income from lease sales 3 -
------------------------------------------------ -------- --------
22 253
------------------------------------------------ -------- --------
6. Loss per share
Unadjusted loss per share
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
------------------------------------------------- ----------- -----------
Loss from continuing operations attributable to
ordinary Shareholders (2,490) (1,279)
------------------------------------------------- ----------- -----------
Loss from continuing and discontinued operations
attributable to ordinary Shareholders (2,488) (1,090)
------------------------------------------------- ----------- -----------
Weighted average number of shares 145,515,022 145,454,118
------------------------------------------------- ----------- -----------
Basic and diluted loss per share - continuing
operations (1.71p) (0.88p)
------------------------------------------------- ----------- -----------
Basic and diluted loss per share - continuing
and discontinued operations (1.71p) (0.75p)
------------------------------------------------- ----------- -----------
Adjusted loss per share
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
------------------------------------------------ ----------- -----------
Loss from continuing operations attributable to
ordinary Shareholders (2,490) (1,279)
------------------------------------------------ ----------- -----------
Share-based payment 409 297
------------------------------------------------ ----------- -----------
Adjusted loss after tax (2,081) (982)
------------------------------------------------ ----------- -----------
Weighted average number of shares 145,515,022 145,454,118
------------------------------------------------ ----------- -----------
Basic and diluted loss per share (1.71p) (0.88p)
------------------------------------------------ ----------- -----------
Basic and diluted adjusted loss per share (1.43p) (0.68p)
------------------------------------------------ ----------- -----------
The inclusion of potential Ordinary Shares arising from LTIPs,
EMI Options and Incentive Shares would be anti-dilutive. Basic and
diluted loss per share has therefore been calculated using the same
weighted number of shares. Ordinary Shares would have been issued
in respect of the Incentive Share conversion. Full details of the
basis of calculation is given in the Admission Document available
on the Company's website. The Incentive Shares will immediately
vest on change of control of the Company.
7. Post balance sheet event
The Group has no post balance sheet events.
8. Profit from discontinued operations
Video Business
On 7 October 2017 the Board signed an agreement for the disposal
of the Video Business segment to Volpi Capital LLP for a maximum
consideration payable of GBP27.5 million in cash, of which GBP25.5
million was payable on completion (on a cash free/debt free basis)
and the remaining GBP2.0 million payable subject to the Video
Business securing a specific trading contract within 12 months
following completion. The sale completed on 31 October 2017.
Further amounts were also payable in the years ended 31 March
2020 and 2021 as a result of sales of a specific category of
inventory. As more than twelve months have passed since the
deferred consideration balance was reduced to GBPnil, further
assessments are no longer considered necessary. No further deferred
consideration is expected.
Income and costs incurred from discontinued operations are as
follows:
Discontinued Operations - Income statement
2021 2020
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Contingent consideration received (sale of inventory) 63 265
Discontinued costs (28) (31)
------------------------------------------------------ -------- --------
Profit before tax attributable to Digital Barriers
discontinued operation 35 234
------------------------------------------------------ -------- --------
Income tax credit/(expense) - -
------------------------------------------------------ -------- --------
Profit after tax attributable to Digital Barriers
discontinued operation 35 234
------------------------------------------------------ -------- --------
Closure of Australasia Office 3 (45)
Dilapidation and closure costs on discontinued
operations (36) -
----------------------------------------------- ---- ----
Profit after tax attributable to discontinued
operations 2 189
----------------------------------------------- ---- ----
No tax arises on disposal income or expenditure.
Cash flows
Cash flows attributable to the disposal group include:
2021 2020
GBP'000 GBP'000
------------------------------------------------------- -------- --------
Net cash outflows attributable to operating activities (61) (31)
Net cash inflows attributable to investing activities 63 265
Net cash flows attributable to financing activities - -
------------------------------------------------------- -------- --------
Cash flows from discontinued operations 2 234
------------------------------------------------------- -------- --------
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July 12, 2021 02:00 ET (06:00 GMT)
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