TIDMWAND
RNS Number : 5422X
WANdisco Plc
05 May 2021
5 May 2021
WANdisco plc
("WANdisco", the "Company" or the "Group")
Audited results for the year ended 31 December 2020
- Primary strategic goal achieved, deeply embedding WANdisco
into cloud fabric
- Microsoft Azure go-to-market launched and Migration Competency
with Amazon Web Services achieved
- Growing opportunity enabling data analytics through Databricks
and Snowflake partnerships
WANdisco (LSE: WAND), the LiveData company announces audited
results for the year ended 31 December 2020.
Financial headlines
-- Revenue for the year of $10.5 million (2019: $16.2 million)
-- Cash overheads(1) of $36.9 million (2019: $31.7 million)
-- Adjusted EBITDA(2) loss of $22.2 million (2019: $11.7 million)
-- Statutory loss from operations of $34.3 million (2019: $28.3 million)
-- Cash at 31 December 2020 of $21.0 million (2019: $23.4 million)
-- Debt at 31 December 2020 of $0.6 million (2019: $2.2 million)
Strategic and operational highlights
-- Go-to-market launch of LiveData Platform for Microsoft Azure in Q4 2020:
o Microsoft's preferred data lake migration solution, appearing
as a native Azure service with metered billing, delivering
self-service data lake migration with zero downtime,
disruption and risk
o Microsoft has estimated a total addressable market ("TAM")
of 200-300 exabytes of on-premise analytical data. Targeting
migration of >100 petabytes of data in FY21
-- Launched LiveData Migrator on Amazon Web Services ("AWS") Cloud and
achieved Migration Competency status in Q3 2020:
o Landmark success with launch customer GoDaddy, seamlessly
migrating 500 terabytes of live data featuring 21,000
change operations every second - only possible through
WANdisco's solution
o Providing AWS customers, a no downtime, easy and efficient
migration of petabyte-scale data lakes to the cloud and
targeting migration of >30 petabytes of data in FY21
-- Expanded partnerships with data analytics platforms Databricks and Snowflake:
o Growing opportunity to support machine learning and artificial
intelligence in the cloud
o Post-period end announced partnership with Snowflake,
to automate, accelerate and simplify the migration of
on-premises Hadoop analytics workloads to Snowflake's
data platform
-- Evolution in 2021 towards consumption-based revenue model - the standard
for the cloud ecosystem:
o With metered billing on Azure, revenue is shifting from
a subscription model in which revenue is recognised up
front, to a consumption-based model where revenue is
recognised over time
-- Meaningful commercial momentum with blue chip customers and partners
support FY21 pipeline:
o Blue chip cloud migration contracts won with: one of
the world's largest media and telecommunications companies;
one of the world's largest airlines; a major British
supermarket; a top three mobile operator; and one of
the largest banks in Africa
o Secured a further $3 million contract with one of the
world's largest media and telecommunications companies
to migrate an initial 13PB Hadoop cluster to Microsoft
Azure
o Signed a global reseller agreement with major systems
integrator Infosys focused on migration
o Integrated LiveData Migrator into IBM's Big Replicate
to capitalise on near-term opportunity of enterprises
migrating off legacy Hadoop platforms
Outlook
-- With the Q4 2020 launch of LiveData Migrator on AWS and the LiveData
Platform on Azure, 2021 marks the beginning of the growth phase
for the Company
-- Significant commercial progress with Microsoft Azure and AWS partnerships,
and expanding ties with system integrators, underpins the Board's
confidence in our outlook and target to deliver at least $35m in
revenues in FY21, targeting the migration of >100PB of data on
Azure and >30PB on AWS
David Richards, Chief Executive Officer and Chairman of
WANdisco, commented:
"In 2020 we achieved our primary strategic goal of launching our
LiveData Platform for Microsoft Azure as a native offering -
becoming deeply embedded into the cloud fabric as Microsoft's
preferred data lake migration solution. In addition, we launched
LiveData Migrator on AWS and became the only vendor to achieve
Migration Competency status, positioning WANdisco as the global
standard for cloud migration to AWS. These milestone achievements
position WANdisco for significant scalable growth in FY21.
"WANdisco is uniquely positioned to enable the next generation
of machine learning and artificial intelligence in the cloud. Our
partnerships with the major cloud vendors and solutions like
Databricks and Snowflake provides a growing opportunity to become
integral to the entire lifecycle of analytical data.
"In FY21, the business is focused on accelerating the conversion
of the 200-300 exabyte cloud migration market identified by
Microsoft by continuing to expand our partner relationships and
delivering on our pipeline. WANdisco enters FY21 with an
unparalleled solution, deeply embedded into the world's largest
cloud ecosystems and with the experience and financial platform to
convert on a vast market opportunity. With these drivers and the
Group's current pipeline and visibility, we remain confident in our
ability to achieve at least $35m in revenues in FY21."
(1) Operating expenses adjusted for: depreciation, amortisation, capitalisation
of development expenditure and equity-settled share-based payment.
See Note 4 to the condensed consolidated financial statements for
a reconciliation.
(2) Operating loss adjusted for: depreciation, amortisation and equity-settled
share-based payment. See Note 4 to the condensed consolidated financial
statements for a reconciliation.
For further information, please contact:
WANdisco plc via FTI Consulting
David Richards, Chief Executive Officer
and Chairman
Erik Miller, Chief Financial Officer
Daud Khan, VP Corporate Development
+44 (0)20 3727
FTI Consulting 1137
Matt Dixon / Chris Birt / Kwaku Aning
+44 (0)20 7710
Stifel (Nomad and Sole Broker) 7600
Fred Walsh / Richard Short
About WANdisco
WANdisco is the LiveData company. WANdisco solutions enable
enterprises to create an environment where data is always
available, accurate and protected, creating a strong backbone for
their IT infrastructure and a bedrock for running consistent,
accurate machine learning applications. With zero downtime and zero
data loss, WANdisco's products keep geographically dispersed data
at any scale consistent between on-premises and cloud environments
allowing businesses to operate seamlessly in a hybrid or
multi-cloud environment. WANdisco has over a hundred customers and
significant go-to-market partnerships with Microsoft Azure, Amazon
Web Services, Google Cloud, Oracle, and others as well as OEM
relationships with IBM and Alibaba. For more information on
WANdisco, visit http://www.wandisco.com.
BUSINESS REVIEW
In 2020, we delivered on our primary strategic goal of launching
LiveData Platform for Microsoft Azure, with joint go-to-market
activity with Microsoft from October 2020, firmly establishing
WANdisco as part of the global cloud fabric. A new Azure service,
the LiveData Platform for Azure, allows customers to use our
software as if it were a native Azure offering. As an Azure
service, customers can deploy WANdisco's LiveData products by
selecting it from the same Azure menu used for native Microsoft
services such as compute and storage, with metered billing added on
their existing monthly Azure payments. No software to install, no
new contracts to sign, no barrier to entry.
Our LiveData Migrator product also launched on AWS in September
2020. AWS launch customer GoDaddy had a data set that was
considered impossible to migrate to the cloud with a data set
featuring 21,000 change operations every second. WANdisco was able
to migrate GoDaddy's target 500 terabytes of live data in a single
scan - a landmark achievement for the Group and the unique LiveData
Migrator product.
In September 2020, we signed a reseller contract with Infosys, a
major global systems integrator with a large cloud migration
practice. Our new LiveData Migrator product will unlock a
previously difficult to service market for them for large,
on-premises to cloud migrations as well as our LiveData Platform
providing hybrid and inter cloud data consistency solutions.
WANdisco continued to build customer momentum heading into Q4
2020, securing a large $3 million further contract with one of the
world's largest media and telecommunications companies in November
2020. Other significant contracts included major blue chip
organisations such as a large media company, a British supermarket
chain, and a major bank in the Southeastern US.
Post-period end in March 2021, the Group completed a successful
fundraising of $42.5 million, to accelerate and strengthen the
Group's commercial position by building balance sheet strength in
order to capitalise on future opportunities to further scale the
business, including expand opportunities with other cloud vendors
such as AWS and Google (GCP), provide capital to accelerate growth
and pursue closer ties with Machine Learning and Artificial
Intelligence ("ML/AI"), Independent Software Vendors ("ISVs") and
widening its System Integrator ("SI") relationships; and provide
capital for greater enablement support for the early stages of
growth as the Group's relationships with current SIs deepen.
On 11 March, the Group also announced a LiveData Migrator
partnership with Snowflake, the data cloud company, to automate,
accelerate and simplify the migration of on-premises Hadoop
analytics workloads to Snowflake's data platform. The partnership
opens a new distribution channel for WANdisco with Snowflake's
c.4,000 customers and significant market share of Fortune 500
customers. The future of analytical data, machine learning and
artificial intelligence is in the cloud, building a medium-term
opportunity for the Group supporting the likes of Databricks and
Snowflake across the entire data lifecycle.
With WANdisco now deeply integrated into the cloud fabric, the
Group is well positioned to scale significantly and to convert the
pipeline of opportunities ahead. More so than ever following the
COVID-19 pandemic, the cloud is where all businesses must operate
and WANdisco now stands as the de facto standard for cloud
migration for petabyte scale blue chip data sets, delivering
self-service migration at any scale, with zero business disruption,
zero risk and best time-to-value. WANdisco enters FY21 with an
unparalleled solution, deeply embedded into the world's largest
cloud ecosystems and with the experience and financial platform to
convert on a vast market opportunity.
The Group also announced its intention to consider the potential
value creation provided by a US market listing, offering access to
a greater pool of capital in the region where many of the Company's
investors reside, alongside an increased profile in the US with its
commercial partners. While the Group continues to be committed to
the AIM market which has supported WANdisco's growth to date
through access to capital, the scale of the opportunity ahead and
increasing US concentration of both customers and investors
provides a compelling rationale to pursue a potential US
listing.
COVID-19 update
The global nature of the COVID-19 virus has resulted in
macroeconomic uncertainty. The impact of COVID-19 in certain
geographies has prompted a reassessment of credit risk and the
realisation of certain receivables. Where appropriate, an estimate
of the potential impairment of these receivables has been made. The
impairment of these receivables is not material to the liquidity of
the Group. Due to the uncertainty of the impact of COVID-19 and
related governmental restrictions, management intends to review
credit risk related to these impacts at each reporting date.
We expect that the launch of products with Microsoft and AWS
will overcome any short-term headwinds from the economic
uncertainty surrounding the impact of COVID-19. With the exception
of the impairment of certain receivables discussed above, we have
experienced minimal effects to our customer base and order flow,
and have not reduced employee-based costs.
KPIs to map the shift to consumption-based revenue model
Group revenues have historically been typified by subscription
contracts in which revenues are recognised up front. With the
introduction of metered billing on Azure, WANdisco has begun a
shift to a consumption-based model. Consumption is the true SaaS,
with customers expecting to purchase on a consumption basis within
the cloud ecosystem through metered billing.
To effectively build consumption revenue streams, sales
compensation must also be changed to incentivise the activation of
customers and the early commitment of customers to build
consumption through the year, as opposed to a single point of
sale.
A consumption-based model provides greater agility and the
ability to scale as required and provides valuable data to evolve
our product and offering. Data on how customers are using the
product drives interaction with customer success much of which is
automated.
This shift to a consumption model, where revenue is recognised
over time rather than up-front, will lead to revenues scaling over
the year, with revenue recognised further into the sales cycle,
metered through use.
As our business continues to evolve, the metrics we use to
measure our success also need to change. To aid in mapping pipeline
progress against this changing revenue model, we will provide a
business update in the short term providing new KPIs (in addition
to the existing revenue and subscription as a % of revenue KPIs)
including:
-- Number of customer wins
-- Notional MRR (metered plus an estimate of subscription revenue
as MRR)
-- Retention rate (% of customers using the product vs. those using
a year earlier)
The objective of these KPIs is to provide an indication of the
rate of conversion of the cloud migration opportunity ahead, to
account for revenues being recognised later in the sales cycle and
financial year through metered consumption.
Outlook
Our cloud platform, SI, and ISV partners have recognised the
huge opportunity of moving Hadoop data into the cloud. With the
changing dynamics in the Hadoop on-premises market, and companies
seeking to leverage cloud economics and scalability, the time to
capitalise on this opportunity is now. The creation of a native
Azure service with our technology provides a platform to capitalise
on that opportunity, taking advantage of billing and technical
integrations. With the go-to-market launch of LiveData Platform for
Azure, we can execute against the growing pipeline of opportunities
to move data at scale into the cloud without an interruption to
service.
Outside of Azure, we are also seeing growing demand from our
other cloud partners, in particular AWS, as the need to capitalise
on the cloud and move on-premises workloads becomes a business
imperative. The Board's confidence in our outlook is built upon the
convergence of the market opportunity, product readiness, and
deepening commitments from our partners.
For FY21, we expect to migrate in excess of 100PB of data to the
Azure cloud (with more than 50 customers signed over the year) and
greater than 30PB into the AWS cloud. Combined with the flow of
metered billing from Q4 2020 this year we expect a minimum revenue
of $35m in FY21.
FINANCIAL REVIEW
Revenue for the year ended 31 December 2020 was $10.5 million
(2019: $16.2 million).
Deferred revenue from sales booked during 2020 and in previous
years, and not yet recognised as revenue, is $3.8 million at 31
December 2020, at 31 December 2019 this stood at $3.8 million. Our
deferred revenue represents future revenue from new and renewed
contracts, many of them spanning multiple years.
Adjusted EBITDA loss(2) was $22.2 million (2019: $11.7 million),
due primarily to the reduction in revenue and continued investments
in the business.
Revenue
Revenue was $10.5 million (2019: $16.2 million), reflecting the
ongoing change in revenue mix between our legacy business and our
big data business as well as an increasing shift to cloud-based
revenues with recurring annual revenues, away from perpetual,
on-premises based revenue. Some deals were delayed into future
years, as potential customers were assessing cloud-based strategies
for data management and analytics, and comparing the availability
of our stand-alone products vs. the launch of our cloud native
service on Azure in October 2020. However, our big data revenue in
2020 grew 18% over 2019, and some larger Application Lifecycle
Management ("ALM") deals in 2019 did not repeat in 2020.
42% of revenues came from 3 new customers during the year, with
a large media and telecommunication company, its analytics
subsidiary, and a large British supermarket chain adopting our big
data solutions with the majority of this revenue based on
multi-year subscription agreements. In 2019, the top 3 customers
represented 43% of revenues, with the majority relating to our ALM
business.
Contract wins continue to exhibit variability in the timing of
their completion.
Operating costs
Cash overheads (1) increased in the year as we made investments
in go-to-market resources and engineering, rising to $36.9 million
from $31.7 million in 2019.
Product development expenditure capitalised was $5.2 million in
the year (2019: $5.1 million). All of this expenditure was
associated with new product features.
Our headcount was 180 as at 31 December 2020 (31 December 2019:
162). Headcount increases in the year were principally in
engineering and sales and marketing as we added capacity to service
our new and expanded channel partner relationships and develop new
cloud-focused products.
Profit and loss
Adjusted EBITDA(2) loss for the year was $22.2 million (2019:
$11.7 million).
The loss after tax for the year increased to $34.3 million
(2019: $28.3 million), as a result of the lower revenue and
increased overheads and partially offset by a lower share-based
payment charge. The finance loss of $1.8 million (2019: $2.0
million loss), reported within finance costs, arose from the
retranslation of intercompany balances at 31 December 2020,
reflecting the increase in Sterling against the US dollar. The
impact of FX rates changes on the financial statements should be
restricted to the retranslation of US dollar denominated
intercompany loans, as opposed to the operating activities of the
business. A translation gain arising on the net assets of overseas
subsidiaries reported in reserves results in a minimal impact on
the group net assets.
Balance sheet and cash flow
Trade and other receivables at 31 December 2020 were $10.1
million (31 December 2019: $8.5 million). This includes $5.3
million of trade receivables (31 December 2019: $2.8 million) and
$4.8 million related to non-trade receivables (31 December 2019:
$5.7 million). The increase in trade receivables was due primarily
to the timing of revenues during the year, which predominantly
occurred in the fourth quarter.
Net consumption of cash was $24.2 million before financing
(2019: $19.4 million), resulting in a closing cash balance of $21.0
million at 31 December 2020. The consumption of cash was due
primarily to lower revenues and a modest increase in cash
overheads. At 31 December 2020, we had drawings under our revolving
credit facility with Silicon Valley Bank of $0.6 million.
On 12 June 2020 the Group announced a placing for the
subscription of 3,100,000 new ordinary shares of 10 pence each in
the Company at a price of 650 pence, raising gross proceeds of
$24.9m.
Subsequent events
After the year end, on 10 March 2021 the Group announced the
subscription and placing of 6,885,572 new ordinary shares of 10
pence each in the Company by existing shareholders at a price of
446 pence (a discount of 0.4% on the closing share price on 9 March
2021) raising gross proceeds of $42.5 million. The proceeds will be
used to support our relationships with strategic partners and
provide growth working capital.
As at 30 April 2021 the Group had cash reserves of $55.3 million
and with the injection of new capital, the Company expects to
invest further in Engineering and Go to Market resources bringing
total cash costs in 2021 to c.$44 million.
Whilst the medium- and long-term impact of COVID-19 is still
uncertain, we are moving forward this year with continued business
momentum as evidenced by our go-to-market launch of LiveData
Platform with Microsoft announced in October 2020 . Our cloud
partners continue to see an acceleration of business operations
moving to the cloud since the beginning of the pandemic and the
business continues to be aligned to this trend. Hence, management
expects that the potential of the agreement with Microsoft will
overcome any short-term headwinds from the economic uncertainty
surrounding the impact of COVID-19.
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2020
Year ended
Year ended 31 December
31 December
2020 2019
(Audited) (Audited)
Continuing operations Note $'000 $'000
----------------------------------------------------- --- ---- ------------ ------------
Revenue 3 10,532 16,155
Cost of sales (1,066) (1,186)
---------------------------------------------------------- ---- ------------ ------------
Gross profit 9,466 14,969
Operating expenses 4 (43,373) (42,148)
---------------------------------------------------------- ---- ------------ ------------
Operating loss 4 (33,907) (27,179)
---------------------------------------------------------- ---- ------------ ------------
Finance income 305 604
Finance costs (2,183) (2,574)
---------------------------------------------------------- ---- ------------ ------------
Net finance costs (1,878) (1,970)
---------------------------------------------------------- ---- ------------ ------------
Loss before tax (35,785) (29,149)
Income tax 1,453 885
---------------------------------------------------------- ---- ------------ ------------
Loss for the year (34,332) (28,264)
========================================================== ==== ============ ============
Other comprehensive income
Items that are or may be reclassified subsequently
to profit or loss:
Foreign operations - foreign currency translation
differences 3,872 1,765
---------------------------------------------------------- ---- ------------ ------------
Other comprehensive income for the year, net
of tax 3,872 1,765
---------------------------------------------------------- ---- ------------ ------------
Total comprehensive income for the year attributable
to owners of the parent (30,460) (26,499)
========================================================== ==== ============ ============
Loss per share
Basic and diluted loss per share 5 ($0.68) ($0.63)
========================================================== ==== ============ ============
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of financial position
At 31 December 2020
31 December
31 December
2020 2019
(Audited) (Audited)
Note $'000 $'000
------------------------------ --- ---- ----------- -----------
Assets
Property, plant and equipment 2,895 3,735
Intangible assets 5,027 4,877
Other non-current assets 6 2,215 3,016
----------------------------------- ---- ----------- -----------
Non-current assets 10,137 11,628
----------------------------------- ---- ----------- -----------
Trade and other receivables 7 10,142 8,545
Cash and cash equivalents 21,039 23,354
----------------------------------- ---- ----------- -----------
Current assets 31,181 31,899
----------------------------------- ---- ----------- -----------
Total assets 41,318 43,527
=================================== ==== =========== ===========
Equity
Share capital 7,641 7,097
Share premium 172,868 149,336
Translation reserve (1,711) (5,583)
Merger reserve 1,247 1,247
Retained earnings (150,851) (121,922)
----------------------------------- ---- ----------- -----------
Total equity 29,194 30,175
----------------------------------- ---- ----------- -----------
Liabilities
Loans and borrowings 8 1,778 2,889
Deferred income 9 659 1,188
Deferred tax liabilities 4 4
----------------------------------- ---- ----------- -----------
Non-current liabilities 2,441 4,081
----------------------------------- ---- ----------- -----------
Current tax liabilities 12 66
Loans and borrowings 8 1,115 2,212
Trade and other payables 5,462 4,371
Deferred income 9 3,094 2,622
Current liabilities 9,683 9,271
----------------------------------- ---- ----------- -----------
Total liabilities 12,124 13,352
----------------------------------- ---- ----------- -----------
Total equity and liabilities 41,318 43,527
=================================== ==== =========== ===========
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2020
Attributable to owners of the Company
--------------------------------------------------------------
Share Share Translation Merger Retained Total
capital premium reserve reserve earnings equity
Audited $'000 $'000 $'000 $'000 $'000 $'000
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2018 6,361 115,909 (7,348) 1,247 (102,365) 13,804
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income for
the year
Loss for the year - - - - (28,264) (28,264)
Other comprehensive income for
the year - - 1,765 - - 1,765
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income for
the year - - 1,765 - (28,264) (26,499)
----------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners of
the Company
Contributions and distributions
Equity-settled share-based payment - - - - 8,707 8,707
Proceeds from share placing 706 33,085 - - - 33,791
Share options exercised 30 342 - - - 372
Total transactions with owners
of the Company 736 33,427 - - 8,707 42,870
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2019 7,097 149,336 (5,583) 1,247 (121,922) 30,175
=================================== ======== ======== =========== ======== ========= ========
Total comprehensive income for
the year
Loss for the year - - - - (34,332) (34,332)
Other comprehensive income for
the year - - 3,872 - - 3,872
----------------------------------- -------- -------- ----------- -------- --------- --------
Total comprehensive income for
the year - - 3,872 - (34,332) (30,460)
----------------------------------- -------- -------- ----------- -------- --------- --------
Transactions with owners of
the Company
Contributions and distributions
Equity-settled share-based payment - - - - 5,403 5,403
Share options exercised 162 106 - - - 268
Proceeds from share placing 382 23,426 - - - 23,808
Total transactions with owners
of the Company 544 23,532 - - 5,403 29,479
----------------------------------- -------- -------- ----------- -------- --------- --------
Balance at 31 December 2020 7,641 172,868 (1,711) 1,247 (150,851) 29,194
=================================== ======== ======== =========== ======== ========= ========
The notes form an integral part of these condensed consolidated
financial statements.
Consolidated statement of cash flows
For the year ended 31 December 2020
Year ended
31 December Year ended
31 December
2020 2019
(Audited) (Audited)
Note $'000 $'000
----------------------------------------------------- --- ---- ------------ ------------
Cash flows from operating activities
Loss for the year (34,332) (28,264)
Adjustments for:
* Depreciation of property, plant and equipment 1,203 1,101
* Amortisation of intangible assets 5,070 5,701
* Net finance costs/(income) 69 (77)
* Income tax (1,453) (885)
* Foreign exchange 3,773 1,869
* Equity-settled share-based payment 10 5,403 8,707
---------------------------------------------------------- ---- ------------ ------------
(20,267) (11,848)
--------------------------------------------------------- ---- ------------ ------------
Changes in:
* Trade and other receivables 339 (1,203)
* Trade and other payables 910 (562)
* Deferred income (57) (508)
Net working capital change 1,192 (2,273)
---------------------------------------------------------- ---- ------------ ------------
Cash used in operating activities (19,075) (14,121)
Interest paid (294) (446)
Income tax received 662 807
---------------------------------------------------------- ---- ------------ ------------
Net cash used in operating activities (18,707) (13,760)
---------------------------------------------------------- ---- ------------ ------------
Cash flows from investing activities
Interest received 21 258
Acquisition of property, plant and equipment (307) (841)
Development expenditure (5,220) (5,062)
Net cash used in investing activities (5,506) (5,645)
---------------------------------------------------------- ---- ------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital 24,076 34,163
Repayment of bank loan (1,666) (1,667)
Payment of lease liabilities (595) (502)
---------------------------------------------------------- ---- ------------ ------------
Net cash from financing activities 21,815 31,994
---------------------------------------------------------- ---- ------------ ------------
Net (decrease)/increase in cash and cash
equivalents (2,398) 12,589
Cash and cash equivalents at 1 January 23,354 10,757
Effect of movements in exchange rates on
cash and cash equivalents 83 8
---------------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at 31 December 21,039 23,354
========================================================== ==== ============ ============
The notes form an integral part of these condensed consolidated
financial statements.
Notes to the condensed consolidated financial statements
For the year ended 31 December 2020
1. Reporting entity
WANdisco plc (the "Company") is a public limited company
incorporated and domiciled in Jersey. The Company's ordinary shares
are traded on AIM. These condensed consolidated financial
statements ("Financial statements") as at and for the year ended 31
December 2020 comprise the Company and its subsidiaries (together
referred to as the "Group"). The Group is primarily involved in the
development and provision of global collaboration software.
2. Basis of preparation
a Basis of accounting
Whilst the financial information included in this preliminary
announcement has been prepared on the basis of the requirements of
International Financial Reporting Standards ("IFRSs") in issue, as
adopted by the European Union ("EU") and effective at 31 December
2020, this announcement does not itself contain sufficient
information to comply with IFRS.
The financial information set out in this announcement does not
constitute the Group's Statutory Accounts for the year ended 31
December 2020 or 31 December 2019, but is derived from those
accounts. Statutory Accounts for the year ended 31 December 2019
which have been audited and delivered to the registrar of companies
with the Jersey Financial Services Commission ("JFSC"), and those
for 2020 will be delivered in May 2021. The auditor has reported on
those accounts; the audit reports were (i) unqualified, (ii) did
not include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 113B (3) or (6) of
the Companies (Jersey) Law 1991.
The Consolidated financial statements have been prepared in
accordance with IFRSs as adopted for use in the EU. The Group has
applied all accounting standards and interpretations issued by the
IASB and International Financial Reporting Committee relevant to
its operations and which are effective in respect of these
Financial statements.
This announcement has been prepared using the accounting
policies consistent with those of the Group's annual financial
statements for the year ended 31 December 2020.
From 1 January 2020 the new standards set out below were adopted
by the Group.
(i) New and amended standards adopted by the Group
The following new standards and amendments to standards that are
effective for the first time for the financial year beginning 1
January 2020 have been adopted:
- Definition of a Business (Amendments to IFRS 3)
- Definition of Material (Amendments to IAS 1 and IAS 8)
- Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and
IFRS 7)
- COVID-19-Related Rent Concessions (Amendment to IFRS 16)
- Amendments to References to the Conceptual Framework in IFRS Standards
These amendments to standards have not had a material impact on
these Financial statements.
(ii) New and amended standards and interpretations issued but
not effective for the financial year beginning 1 January 2020 and
not early adopted
A number of new standards are effective for annual periods
beginning after 1 January 2020 and earlier application is
permitted; however, the Group has not early adopted the new or
amended standards in preparing these Financial statements.
The amended standards and interpretations are not expected to
have a significant impact on the Group's consolidated financial
statements.
2. Basis of preparation (continued)
b Going concern basis of accounting
These Financial statements have been prepared on a going concern
basis, which assumes that the Group will be able to meet the
mandatory repayment terms of the banking facilities as disclosed in
Note 8.
As at 31 December 2020 the Group had net assets of $29.2m (31
December 2019: $30.2m), including cash of $21.0m (2019: $23.4m) as
set out in the consolidated statement of financial position, with a
debt facility drawn of $0.6m (2019: debt facility drawn of $2.2m).
In the year ended 31 December 2020, the Group incurred a loss
before tax of $35.8m (2019: $29.1m) and net cash outflows before
financing of $24.2m (2019: $19.4m).
During 2020, the performance of the Group declined, with
revenues reducing by 35% to $10.5m (2019: $16.2m) and operating
loss increasing to $33.9m (2019: $27.2m).
The Directors have prepared a detailed budget and forecast of
the Group's expected performance over a period covering at least
the next twelve months from the date of the approval of these
financial statements. As well as modelling the realisation of the
sales pipeline, these forecasts also cover a number of scenarios
and sensitivities in order for the Board to satisfy itself that the
Group remains within its current cash facilities, details of which
are included in Note 8. The cash flow model includes the injection
of $42.5m of cash which was raised following the year end ($30.0m
on 9 March 2021 and $12.5m approved by the shareholders on 29 March
2021).
Whilst the Directors are confident in the Group's ability to
grow revenue, the Board's sensitivity modelling (which considered
the impact of Brexit and COVID-19) shows that the Group can remain
within its facilities in the event that revenue growth is delayed
(i.e. revenue does not increase from the level reported in 2020)
for a period in excess of twelve months. The Directors' financial
forecasts and operational planning and modelling also include the
actions, under the control of the Group, that they could take to
further significantly reduce the cost base during the coming year
in the event that longer-term revenues were set to remain
consistent with the level reported in 2020. On the basis of this
financial and operational modelling, the Directors believe that the
Group has the capability and the operational agility to react
quickly, cut further costs from the business and ensure that the
cost base of the business is aligned with its revenue and funding
scale.
As a consequence, the Directors have a reasonable expectation
that the Group can continue to operate within its existing
facilities and be able to meet its commitments and discharge its
liabilities in the normal course of business for a period not less
than twelve months from the date of approval of these financial
statements. Accordingly, they continue to adopt the going concern
basis in preparing the Group financial statements.
c Functional and presentational currency
The consolidated financial statements are presented in US
dollars, as the revenue for the Group is predominately derived in
this currency. Billings to the Group's customers during the year by
WANdisco, Inc. were all in US dollars with certain costs being
incurred by WANdisco International Limited in sterling and
WANdisco, Pty Ltd in Australian dollars. All financial information
has been rounded to the nearest thousand US dollars unless
otherwise stated.
d Alternative performance measures
The Group uses a number of alternative performance measures
("APMs") which are non-IFRS measures to monitor the performance of
its operations. The Group believes these APMs provide useful
historical financial information to help investors and other
stakeholders evaluate the performance of the business and are
measures commonly used by certain investors for evaluating the
performance of the Group. In particular, the Group uses APMs which
reflect the underlying performance on the basis that this provides
a more relevant focus on the core business performance of the Group
and aligns with our KPIs. Adjusted results exclude certain items
because if included, these items could distort the understanding of
our performance for the year and the comparability between periods.
The Group has been using the following APMs on a consistent basis
and they are defined and reconciled as follows:
- Cash overheads: Operating expenses adjusted for: depreciation,
amortisation, capitalisation of development expenditure and equity-settled
share-based payment. See Note 4 for a reconciliation.
- Adjusted EBITDA: Operating loss adjusted for: depreciation, amortisation
and equity-settled share-based payment. See Note 4 for a reconciliation.
e Use of judgements and estimates
In preparing these Financial statements, management has made
judgements and estimates that affect the application of the Group's
accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the last annual
financial statements.
3. Revenue and segmental analysis
a Operating segments
The Directors consider there to be one operating segment, being
that of development and sale of licences for software and related
maintenance and support.
b Geographical segments
The Group recognises revenue in three geographical regions based
on the location of customers, as set out in the following
table:
Year ended Year ended
31 December 31 December
2020 2019
(Audited) (Audited)
Revenue $'000 $'000
--------------------------------- --- ------------ ------------
North America - USA 8,635 6,551
North America - other 34 44
Europe 1,096 2,152
Rest of the world - China 412 5,036
Rest of the world - South Africa 62 2,088
Rest of the world - other 293 284
-------------------------------------- ------------ ------------
10,532 16,155
===================================== ============ ============
Management makes no allocation of costs, assets or liabilities
between these segments since all trading activities are operated as
a single business unit.
c Major products
The Group's core patented technology, Distributed Coordinated
Engine "DConE", enables the replication of data. This core
technology is contained in all the Group's products.
d Major customers
Year ended Year ended Year ended Year ended
31 December 31 December
2020
2020 (Audited) 31 December 31 December
2019 2019
(Audited) (Audited) (Audited)
% of Revenue % of Revenue
revenue $'000 revenue $'000
----------- ------------ ------------ ------------ ------------
Customer 1 24% 2,515 - -
Customer 2 10% 1,070 - -
Customer 3 3% 265 19% 3,117
Customer 4 1% 62 13% 2,088
Customer 5 1% 137 11% 1,857
=========== ============ ============ ============ ============
No other single customers contributed 10% or more to the Group's
revenue (2019: $nil).
e Split of revenue by timing of revenue recognition
Year ended Year ended
31 December 31 December
2020 2019
(Audited) (Audited)
Revenue $'000 $'000
------------------------------------------------ --- ------------ ------------
Licences and services transferred at a point in
time 7,607 12,596
Services transferred over time 2,925 3,559
----------------------------------------------------- ------------ ------------
10,532 16,155
==================================================== ============ ============
f Contract balances
The following table provides information about receivables and
contract assets and liabilities from contracts with customers.
31 December
31 December
2020 2019
(Audited) (Audited)
$'000 $'000
------------------------------------------------------ --- ----------- -----------
Receivables, which are included in "Other non-current
assets - accrued income" 2,124 2,826
Receivables, which are included in "Trade and other
receivables - accrued income" 1,480 2,964
Contract liabilities, which are included in "Deferred
income" - non-current (659) (1,188)
Contract liabilities, which are included in "Deferred
income" - current (3,094) (2,622)
=========================================================== =========== ===========
4. Cash overheads and Adjusted EBITDA
Year ended Year ended
31 December 31 December
2020 2019
(Audited) (Audited)
a Reconciliation of operating expenses to "Cash Note
overheads": $'000 $'000
------------------------------------------------ --- ---- ------------ ------------
Operating expenses (43,373) (42,148)
Adjusted for:
Amortisation and depreciation 6,273 6,802
Equity-settled share-based payment 10 5,403 8,707
Development expenditure capitalised (5,220) (5,062)
----------------------------------------------------- ---- ------------ ------------
Cash overheads (36,917) (31,701)
===================================================== ==== ============ ============
Year ended Year ended
31 December 31 December
2020 2019
(Audited) (Audited)
b Reconciliation of operating loss to "Adjusted Note
EBITDA": $'000 $'000
-------------------------------------------------- --- ---- ------------ ------------
Operating loss (33,907) (27,179)
Adjusted for:
Amortisation and depreciation 6,273 6,802
Equity-settled share-based payment 10 5,403 8,707
------------------------------------------------------- ---- ------------ ------------
Adjusted EBITDA (22,231) (11,670)
Development expenditure capitalised (5,220) (5,062)
------------------------------------------------------- ---- ------------ ------------
Adjusted EBITDA including development expenditure (27,451) (16,732)
======================================================= ==== ============ ============
5. Loss per share
a Basic loss per share
The calculation of basic loss per share has been based on the
following loss attributable to ordinary shareholders and weighted
average number of ordinary shares outstanding:
Year ended Year ended
31 December 31 December
2020 2019
(Audited) (Audited)
$'000 $'000
-------------------------------------------------------- --- ------------ ------------
Loss for the year attributable to ordinary shareholders 34,332 28,264
============================================================= ============ ============
Number Number
of shares of shares
Weighted average number of ordinary shares '000 '000
-------------------------------------------------------- --- ------------ ------------
Issued ordinary shares at 1 January 48,241 42,523
Effect of shares issued in the year 2,251 2,608
------------------------------------------------------------- ------------ ------------
Weighted average number of ordinary shares at 31
December 50,492 45,131
============================================================= ============ ============
2020 2019
$ $
--------------------- --- ---- ----
Basic loss per share 0.68 0.63
========================== ==== ====
5. Loss per share (continued)
b Adjusted loss per share
Adjusted loss per share is calculated based on the loss
attributable to ordinary shareholders before net foreign exchange
loss, acquisition-related items and the cost of equity-settled
share-based payment, and the weighted average number of ordinary
shares outstanding:
Year ended Year ended
31 December 31 December
2020 2019
(Audited) (Audited)
Adjusted loss for the year: Note $'000 $'000
------------------------------------------- --- ---- ------------ ------------
Loss for the year attributable to ordinary
shareholders 34,332 28,264
Adjusted for:
Net foreign exchange loss (1,809) (2,047)
Equity-settled share-based payment 10 (5,403) (8,707)
------------------------------------------------ ---- ------------ ------------
Adjusted loss for the year 27,120 17,510
================================================ ==== ============ ============
2020 2019
$ $
------------------------ --- ---- ----
Adjusted loss per share 0.54 0.39
============================= ==== ====
c Diluted loss per share
Due to the Group having losses in all years presented, the fully
diluted loss per share for disclosure purposes, as shown in the
consolidated statement of profit or loss and other comprehensive
income, is the same as for the basic loss per share.
6. Other non-current assets
31 December
31 December
2020 2019
(Audited) (Audited)
Due in more than a year: $'000 $'000
------------------------------- --- --- ----------- -----------
Other receivables 91 190
Accrued income 2,124 2,826
----------------------------------------- ----------- -----------
Total other non-current assets 2,215 3,016
========================================= =========== ===========
7. Trade and other receivables
31 December
31 December
2020 2019
(Audited) (Audited)
Due within a year: $'000 $'000
----------------------------------- --- --- ----------- -----------
Trade receivables 5,319 2,773
Other receivables 411 753
Accrued income 1,480 2,964
Corporation tax 2,277 1,441
Prepayments 655 614
----------------------------------- ------- ----------- -----------
Total trade and other receivables 10,142 8,545
=================================== ======= =========== ===========
8. Loans and borrowings
31 December 31 December
2020 2019
(Audited) (Audited)
$'000 $'000
------------------------------------- --- --- ----------- -----------
Non-current liabilities
Secured bank loan - 555
Lease liabilities 1,778 2,334
----------------------------------------------- ----------- -----------
1,778 2,889
--------------------------------------------- ----------- -----------
Current liabilities
Current portion of secured bank loan 556 1,667
Current portion of lease liabilities 559 545
----------------------------------------------- ----------- -----------
1,115 2,212
--------------------------------------------- ----------- -----------
Total loans and borrowings 2,893 5,101
=============================================== =========== ===========
At 31 December 2020, the $0.6m of bank loan (2019: $2.2m)
represents term debt drawn down with Silicon Valley Bank. The
facility comprises $0.6m (2019 $2.2m) term debt, with an
interest-only period to 31 May 2018, followed by a three-year
maturity at a floating interest rate charged at 1.5% above the US
prime rate. The bank loan is secured over the assets of WANdisco,
Inc.
9. Deferred income
Deferred income represents contracted sales for which services
to customers will be provided in future periods.
31 December 31 December
2020 2019
(Audited) (Audited)
Deferred income which falls due: $'000 $'000
--------------------------------- --- --- ----------- -----------
Within a year 3,094 2,622
In more than a year 659 1,188
Total deferred income 3,753 3,810
=========================================== =========== ===========
10. Share-based payment
The Group operates share option plans for employees of the
Group. Options in the plans are settled in equity in the Company
and are normally subject to a vesting schedule but not conditional
on any performance criteria being achieved.
The terms and conditions of the share option grants are detailed
in the Group annual financial statements for the year ended 31
December 2020.
a Expense recognised in profit or loss
Year ended
Year ended
31 December 31 December
2020 2019
(Audited) (Audited)
$'000 $'000
------------------------------------------------ --- --- ------------ ------------
Total equity-settled share-based payment charge 5,403 8,707
========================================================== ============ ============
b Summary of share options outstanding
2020 2019
Number Number
of options of options
Number of share options outstanding: (Audited) (Audited)
------------------------------------- ----------- -----------
Outstanding at 1 January 5,028,157 4,662,070
Forfeited during the year (159,190) (283,257)
Exercised during the year (1,272,143) (229,965)
Granted during the year 674,860 879,309
-------------------------------------- ----------- -----------
Outstanding at 31 December 4,271,684 5,028,157
-------------------------------------- ----------- -----------
Exercisable at 31 December 2,784,861 2,983,106
-------------------------------------- ----------- -----------
Vested at 31 December 2,784,861 2,983,106
====================================== =========== ===========
11. Contingent liabilities
The Group had no contingent liabilities at 31 December 2020 (31
December 2019: None).
12. Subsequent events
On 9 March 2021 the Group announced a new subscription of shares
to an existing shareholder for 4,864,480 new ordinary shares of 10
pence each in the Company at a price of 446 pence raising gross
proceeds of $30.0m.
In addition, on 10 March 2021 the Group announced the placing
(which was approved by General Meeting on 29 March 2021) for
804,972 new ordinary shares of 10 pence each in the Company
together with the subscription of 1,216,120 new ordinary shares of
10 pence each at a price of 446 pence (a discount of 0.4% on the
closing share price on 9 March 2021), raising further gross
proceeds of $12.5m.
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