TIDMITIM
RNS Number : 6750M
itim Group PLC
23 September 2021
itim Group plc
("itim" or the "Company and with its subsidiaries the
Group")
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2021
ITIM Group plc (AIM:ITIM), the provider of an Omni channel
platform for retailers, is pleased to report its unaudited results
for the 6 months ended 30 June 2021.
FINANCIAL HIGHLIGHTS
-- Successful IPO in June 2021 raising GBP6.9m net to support the Group's long-term growth
-- Revenue increased 16% to GBP6.4m (30 June 2020 (HY2020): GBP5.5m)
-- Gross profit increased by 29% to GBP2.7m (HY2020: GBP2.1m)
-- Adjusted EBITDA(1) increased by 200% to GBP1.2m (HY2020: GBP0.4m)
-- Operating profit GBP0.6m up from a loss of GBP0.1m at HY2020
-- Normalised Basic EPS(2) 2.24p per share
-- Cash at the period end was GBP9.6m (HY 2020: GBP1.3m)
OPERATIONAL HIGHLIGHTS
-- Appointment of Justin King, Lee Williams and Frank Lewis to
our board as Non-Executive Directors
-- Annual recurring revenue contract value in the 6 month period
increased 9% to GBP10.5m from GBP9.6m at 31 December 2020
Ali Athar, CEO of itim Group plc, said:
"2021 has been a transformational year for itim during which we
have delivered strong growth and strategic process and completed a
successful IPO and admission to AIM.
We have maintained positive trading momentum through the early
part of H2 2021 and the board anticipates full year results in line
with market expectations.
We continue to make good progress against our strategic
objectives and we are seeing an increasing number of opportunities
as the retail sector continues to experience considerable
structural change.
I would like to express my thanks to our colleagues, customers
and our shareholders for their support of itim. I am confident we
are very well placed to continue to build on our momentum and
achieve our significant growth ambitions."
Enquiries:
Ali Athar, CEO
Itim Group plc Ian Hayes CFO 0207 598 7700
WH Ireland (NOMAD Katy Mitchell
& Broker) Harry Ansell 0207 220 1666
Dan de Belder
Hudson Sandler Jake Brown 0207 710 8944
ABOUT ITIM
itim was established in 1993 by its founder, and current Chief
Executive Officer, Ali Athar. itim was initially formed as a
consulting business, helping retailers effect operational
improvement. From 1999 the Company began to expand into the
provision of proprietary software solutions and by 2004 the Company
was focused exclusively on digital technology. itim has grown both
organically and through a series of acquisitions of small, legacy
retail software systems and associated applications which itim has
redeveloped to create a fully integrated end to end Omni-channel
platform.
1. Adjusted EBITDA refers to earnings before interest, tax,
depreciation, amortisation, share based payments and exceptional
items
2. Normalised EPS - after stripping out exceptional IPO
costs
CEO's Statement
The period ended 30 June 2021 saw an outstanding performance
from itim with 16% revenue growth to GBP6.4m (HY2020: GBP5.5m) with
adjusted EBITDA increasing by 200% to GBP1.2m (HY2020 GBP0.4m).
For itim, as with so many businesses, the pandemic over the last
15 months has presented significant challenges especially as itim
serves bricks and mortar retailers who have been closed due to
COVID restrictions.
However, we understand that what has come to the forefront in
many retailers' minds is the need for an Omni-channel offering to
join up both online and the store estate where there is a single
view of stock which can be fulfilled from the warehouse or the
local store using dynamic order routing, with click and collect and
despatch from store becoming more prevalent using local stores as
mini warehouses.
Whilst many outsiders may see store closures as headlines,
surprisingly we are seeing our retail customers still opening more
stores with evidence suggesting that significant proportion of
customers live within close proximity to their local stores. This
can present a real challenge of whether home delivery economics and
the desire for convenience is better served through local
distribution than through trying to distribute product from
central/regional warehouses.
Despite the pandemic we have seen the Group's KPI's improving in
a challenging environment, culminating in a successful IPO in June
2021 which gives me reason to be optimistic going forward. I am
also delighted to welcome Justin King, the former long-standing
chief executive of Sainsbury's; Lee Williams, the current CFO at
French Connection and Frank Lewis, a Corporate Governance expert to
our board to guide us in public life.
At an operational level we continue to build our platform
capability, and as already reported, in July 2020 we acquired EDI
Plus, a business that enables retailers to electronically integrate
backwards into their supply chain, enabling stock to be held with
and fulfilled by the supplier, effectively increasing the
retailer's product offering without compromising warehouse
space.
The Group's focus is on multi year subscription contracts
generally between 3 and 5 years which has provided resilience in an
uncertain world. Our objectives are to continue to increase our
annual recurring revenues ("ARR") based on subscription
contracts.
Those projects in early 2020 that we believed were cancelled are
now slowly being put back on the table as retailers become more
confident but also understand the need and importance of an
Omni-channel offering which gives us increasing confidence as we
continue to build up a strong future revenue pipeline.
People at itim never cease to amaze me and I would like to thank
every member of the team for their hard work and commitment in a
challenging environment, continually meeting our customers' needs
and going the extra mile.
Since our IPO in June we have been focussing on 3 things across
the business:
1) We needed to increase headcount, and we have already
recruited 25 people across the Group. This was critical to being
able to service new contracts, and one of the reasons we were
raising funds. This process is on-going, and of course everyone is
aware there is a growing skills shortage exacerbated by Brexit, as
access to European engineers is blocked which we continue to keep
under review.
2) We are continuing to invest in innovation. We are launching a
significant number of new applications that will make our product
portfolio more attractive.
3) We have increased our investment in sales and marketing, to
allow us to reach out to the market more broadly. We will be
increasing our advisory board, to bring more senior retailers into
the fold to act as brand ambassadors for the business.
Overall I am very pleased with these results. Our key metrics
are improving and our adjusted EBITDA increasing 200% continues to
demonstrate the strengthening of our product offering and business
as a whole. The new investment from our successful float
strengthens our Balance Sheet, enabling the Group to execute its
strategy.
Ali Athar
Chief Executive Officer
Financial Review
I am pleased to announce our first set of results since becoming
a public company in June 2021. The Group benefits from having long
term contracted recurring revenues which has provided some
insulation from the pandemic since the country first went into
lockdown in March 2020. In addition, as customers came to terms
with the impacts of COVID 19 on their businesses, new focus emerged
on Omni-channel retailing which has seen customers once again
opening conversations on projects that had been postponed which is
encouraging for the Group as a sense of normality returns.
Total revenue increased by 16% to GBP6.4m (HY20:GBP5.5m) which
includes a full six month contribution from the EDI Plus
acquisition which was completed on 1 July 2020. The underlying
revenue of the business increased by 4%.
Booked SaaS revenues increased 26% to 4.9m with the acquisition
subscription revenues representing 13% of the increase. Annual
recurring revenue ("ARR") at 30 June 2021 was GBP10.5m. It is worth
noting that significant revenues are generated in Brazil for our
Portuguese subsidiary. With the weakness of the Brazilian Real
against the Euro and the strengthening of Sterling against the Euro
the Group is exposed to foreign exchange risk both at an invoicing
and reporting currency level. Despite the degradation of foreign
exchange on our Brazilian contracts, ARR increased 9% over the 6
month period from the full year at the 31(st) December 2020.
Gross profit increased 29% to GBP2.7m with a gross margin of 41%
(HY 2020: 37%). There are two main factors affecting our margins.
Firstly implementation costs of new subscription deals in our LATAM
business are fully expensed in the period in which they occur.
Secondly the EDI Plus acquisition has lower subscription margins to
the underlying Group which has led to the subscription gross margin
decreasing by 8% to 65%. But the Directors consider the acquisition
to be essential as we extend the platform capabilities and view the
reduction in subscription margin as a short term issue.
Operating expenses (defined as administrative expenses excluding
exceptional items, depreciation, amortisation and interest)
decreased 22% to GBP1.4m from GBP1.8m despite the inclusion of the
EDI Plus operating expenses predominantly due to lower headcount,
with staff not travelling on customer projects and office costs
being substantially reduced.
Adjusted EBITDA(1) increased 200% showing a profit for HY21 of
GBP1.2m (HY2020: GBP0.4m) which was in line with management's
expectations.
Exceptional costs are the IPO costs when the Group was admitted
to AIM in June 2021. In accordance with IAS32, an assessment of the
IPO costs was undertaken with GBP0.5m being written off against
share premium as direct costs of the new share issuance.
The loss before tax was GBP0.1m which was after expensing
GBP0.6m of exceptional IPO costs. Adjusting for exceptional costs
the Group made a profit of GBP0.5m for HY21 compared to a loss in
HY20 of GBP0.2m.
Basic EPS for HY21 was a loss of 0.2p per share (HY20: 0.27p per
share). However, normalised(2) EPS for HY21 which strips out the
exceptional one-off float costs, is 2.24p per share.
During the period the Group successfully raised GBP6.9m (net
after expenses) and was admitted to AIM on 28(th) June 2021. As a
result the cash balance at HY21 was GBP9.6m (HY20: GBP1.3m)
Ian Hayes
Chief Financial Officer
Consolidated Statement of Comprehensive Income
Six month Six month Year ended
period ended period ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
Notes GBP000 GBP000 GBP000
Continuing operations
Revenue 6,366 5,467 11,820
Cost of sales (3,704) (3,414) (7,114)
-------------- -------------- ---------------------
Gross profit 2,662 2,053 4,706
Other income - 170 202
Administrative expenses (1,433) (1,845) (3,374)
-------------- -------------- ---------------------
Profit before interest, tax, depreciation
and amortisation 1,229 378 1,534
Amortisation of intangible assets (378) (226) (515)
Share option charge (91) (91) (91)
Depreciation (17) (24) (45)
Depreciation of right of use asset (122) (102) (231)
Loss on disposal of right of use
assets - - (9)
-------------- -------------- ---------------------
Operating profit/(loss) 621 (65) 643
Exceptional IPO costs (630) - -
Finance costs (48) (57) (114)
Other interest - right of use assets (51) (32) (67)
Finance income - - -
-------------- -------------- ---------------------
(Loss)/Profit before taxation (108) (154) 462
Income tax 56 222 494
-------------- -------------- ---------------------
(Loss)/Profit for the period/year (52) 68 956
Other comprehensive income
Exchange differences on retranslation
of foreign operations (74) 73 63
Total comprehensive income for
the year attributable to the equity
shareholders of the parent company (126) 141 1,019
============== ============== =====================
Earnings (loss) per share
Basic - pence 2 (0.20) 0.27 3.74
Diluted - pence 2 (0.20) 0.24 3.31
-------------- -------------- ---------------------
Consolidated Statement of Financial Position
As at As at As at
30 June 2021 30 June 2020 31 December
2020
Unaudited Unaudited Audited
Notes GBP000 GBP000 GBP000
Assets
Non-current assets
Intangible assets 8,391 5,852 8,206
Property, plant and equipment 54 73 53
Right of use asset 795 1,675 897
Deferred tax 205 229 298
============== ============== =============
9,445 7,829 9,454
============== ============== =============
Current assets
Trade and other receivables 3,361 2,783 3,492
Cash and cash equivalents 9,567 1,335 2,127
-------------- -------------- -------------
Total current assets 12,928 4,118 5,619
Total assets 22,373 11,947 15,073
Liabilities
Current liabilities
Trade and other payables (1,976) (2,546) (2,057)
Right of Use liability (297) (370) (248)
Total current liabilities (2,273) (2,916) (2,305)
Non-current liabilities
Loans and borrowings (3,727) (1,319) (4,011)
Right of Use liability (578) (1,172) (729)
Deferred tax (496) (180) (501)
Total non-current liabilities (4,801) (2,671) (5,241)
Total liabilities excluding accruals
and deferred income (7,074) (5,587) (7,546)
Total net assets before accruals
and deferred income 15,299 6,360 7,527
============== ============== =============
Accruals and deferred income 2,637 2,224 2,513
Capital and reserves attributable
to
shareholders of the parent company
Share capital 1,561 2.379 2,379
Capital redemption reserve 1,103 - -
Share premium account 7,398 10,469 10,469
Share options reserve 395 304 304
Foreign exchange reserve 71 155 145
Retained profit/(losses) 2,134 (9,171) (8,283)
-------------- -------------- -------------
Shareholders' funds 12,662 4,136 5,014
Shareholders' funds plus accruals
and deferred income 15,299 6,360 7,527
============== ============== =============
Consolidated Cash Flow
Six month Six month Year ended
period ended period ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
Notes GBP000 GBP000 GBP000
Cash flows from operating activities
Profit after taxation (52) 68 956
Adjustments for:
Taxation credit (56) (222) (494)
Finance costs 48 57 114
Share option charge 91 91 91
Other interest on leases 51 32 67
Finance income - -
Exchange gain/ (loss) (73) 73 49
Amortisation and depreciation 517 352 791
Exceptional - IPO costs 630 -
Loss on disposal of right of use
asset - - 9
-------------- -------------- -------------
Cash flows from operations before
working capital changes 1,156 451 1,583
Changes in trade and other receivables 275 320 275
Changes in trade and other payables 43 759 60
-------------- -------------- -------------
Cash generated from operations 1,474 1,530 1,918
Finance costs (48) (57) (69)
Finance income - - -
Taxation received - - 285
-------------- -------------- -------------
Net cash flow from operating activities 1,426 1,473 2,134
Cash flow from investing activities
Additions of intangible assets (619) (862) (1,227)
Purchase of property, plant and
equipment (7) (16) (17)
Cash acquired with subsidiary - - 277
Payment to acquire subsidiary - - (223)
Net cash flow from investing activities (626) (878) (1,190)
Net cash flow before financing
activities 800 595 944
-------------- -------------- -------------
Cash flow from financing activities
Proceeds from ordinary share issue-
net of costs 6,872
Proceeds from exercise of share
options 180
Loan repayments (284) (308) -
Payment of lease liabilities (128) (342) (457)
Bank loans received - - 250
Net cash flow from/(to) financing
activities 6,640 (650) (207)
-------------- -------------- -------------
Net increase/(decrease) in cash
and cash equivalents 7,440 (55) 737
============== ============== =============
Opening cash and cash equivalents 2,127 1,390 1,390
-------------- -------------- -------------
Closing cash and cash equivalents 9,567 1,335 2,127
============== ============== =============
Consolidated Statement of Changes in Equity
Share Capital Share Share Foreign Retained Total
capital Redemption Premium option exchange Earnings Equity
Reserve reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2021 2,379 - 10,469 304 145 (8,283) 5,014
Profit for the period - - - - (52) (52)
Exchange differences
on retranslation of
foreign operations - - - (74) - (74)
--------- ------------ ----------- --------- ---------- ---------- --------
Total comprehensive
income - - - (74) (52) (126)
Issue of ordinary
shares
Expenses relating
to ordinary share
issue
Share buyback of deferred
shares
Cancellation of share - - -
premium (1,103) 1,103 (10,469) - - 10,469 -
Share issuance - IPO 260 7,740 8,000
Option conversion
SR 13 8 21
Option conversion
JK 12 148 160
IPO expenses -498 -498
Share based payment
charge - - 91 - - 91
--------- ------------ ----------- --------- ---------- ---------- --------
At 30 June 2021 (unaudited) 1,561 1,103 7,398 395 71 2,134 12,662
========= ============ =========== ========= ========== ========== ========
At 1 January 2020 2,379 - 10,469 213 82 (9,239) 3,904
Profit for the year - - - - - 68 68
Exchange differences
on retranslation of
foreign operations - - - - 73 - 73
--------- ------------ ----------- --------- ---------- ---------- --------
Total comprehensive
income 68 141
Share based payment
charge - - - 91 - - 91
-
--------- ------------ ----------- --------- ---------- ---------- --------
At 30 June 2020 (unaudited) 2,379 - 10,469 304 155 (9,171) 4,136
========= ============ =========== ========= ========== ========== ========
At 1 January 2020 2,379 10,469 213 82 (9,239) 3,904
Profit for the year - - - - 956 956
Exchange differences
on retranslation of
foreign operations - - - 63 - 63
--------- ------------ ----------- --------- ---------- ---------- --------
Total comprehensive
income - - 63 956 1,019
Share based payments
charge - - - 91 - - 91
At 31 December 2020
(audited) 2.379 - 10,469 304 145 (8,283) 5,014
========= ============ =========== ========= ========== ========== ========
Notes to the Financial Information
1. General information
itim Group plc is a public limited Company ("Company")
incorporated in the United Kingdom under the Companies Act 2006
(registration number 03486926). The Company is domiciled in the
United Kingdom and its registered address is 2(nd) Floor, Atlas
House, 173 Victoria Street, London SW1E 5NH. The Company's ordinary
shares are admitted to trading on the AIM market of the London
Stock Exchange ("AIM").
The Group's principal activities have been the provision of
technology solutions to help clients drive improvements in
efficiency and effectiveness.
The Group's interim report and accounts for the six months ended
30 June 2021 have been prepared using the recognition and
measurement principles of International Financial Reporting
Standards and Interpretations as endorsed by the European Union
(collectively "Adopted IFRS").
These interim financial statements for the six months ended 30
June 2021 have been prepared in accordance with the AIM Rules for
Companies and should be read in conjunction with the financial
statements for the year ended 31 December 2020, which have been
prepared in accordance with IFRS as adopted by the European Union.
The interim report and accounts do not include all the information
and disclosures required in the annual financial statements.
The interim report and accounts have been prepared on the basis
of the accounting policies, presentation and methods of computation
as set out in the Group's December 2020 Annual Report and Accounts,
except for those that relate to new standards and interpretations
effective for the first time for periods beginning on (or after) 1
January 2021, and will be adopted in the 2021 annual financial
statements.
The interim report and accounts do not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. These interim financial statements were approved by the Board
of Directors on 9(th) September 2021. The results for the six
months to 30 June 2021 and the comparative results for the six
months to 30 June 2020 are unaudited. The figures for the period
ended 31 December 2020 are extracted from the audited statutory
accounts of the Group for that period.
The Directors believe that a combination of the Group's current
cash, projected revenues from existing and future contracts will
enable the Group to meet its obligations and to implement its
business plan in full. Inherently, there can be no certainty in
these matters, but the Directors believe that the Group's internal
trading forecasts are realistic and that the going concern basis of
preparation continues to be appropriate
2. Earnings per share
Basic and diluted loss per share is calculated by dividing the
loss attributable to owners of the parent by the weighted average
number of ordinary shares in issue during the period. For the
avoidance of doubt the deferred shares have been excluded as they
have no rights to profits or capital. Additionally the Company's
ordinary shares were subject to a share consolidation where 5
ordinary shares were converted into 1 ordinary share. The
comparative period weighted average number of shares has been
adjusted for this to aid comparison. The Company's share options
have a dilutive effect over the three year period.
6 months ended 6 months Year ended
30 June 2021 ended 30 31 December
Unaudited June 2020 2020
Unaudited Audited
GBP000 GBP000 GBP000
Profit (loss) for the year/ period
attributable to owners of the
parent on continuing operations
- GBP000 (52) 68 956
Weighted average number of shares
- 000 25,817 25,534 25,534
Potentially dilutive share options
- 000 3,679 3,215 3,318
Basic earnings (loss) per share
- pence (0.20) 0.27 3.74
on continuing operations
----------------- ------------ --------------
Diluted earnings (loss) per share
- pence (0.20) 0.24 3.31
on continuing operations
----------------- ------------ --------------
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