TIDMDEV
RNS Number : 0888E
Dev Clever Holdings PLC
05 July 2021
Dev Clever Holdings plc
('Dev Clever', the 'Group' or the 'Company')
Interim Results for the period ended 30 April 2021.
Accelerated progress made in creating an independent market
leader in the global EdTech space
Dev Clever (LSE: DEV) is pleased to announce its unaudited
interim results for the six months ended 30 April 2021 ('the
Period").
Financial Highlights:
-- Revenue up 531% at GBP2.4m for the Period (H1 2020: GBP383k)
and supported by significant contract wins in the Educate
division.
-- EBITDA loss of GBP162k (H1 2020: loss of GBP561k), which
includes non-cash share-based expenses of GBP201k (H1 2020:
GBP44k).
-- Adjusted [1] loss after tax of GBP92k (H1 2020: loss of GBP551k).
-- Cash position at period end of GBP9.7m (H1 2020: GBP472k).
This is after further investment in intangible assets including the
acquisition of intellectual property rights of GBP4.4m from Veative
Labs Pte Limited ("Veative") and further investment in the
Launchyourcareer.com platform of GBP1.0m in advance of the India
activation with the National Independent Schools Alliance ("NISA").
Current cash position GBP10.85m.
-- Net proceeds from fundraising activity of GBP15.0m with
further deferred cash proceeds of GBP1.9m received post period
end.
-- Loss per share of 0.06 pence (H1 2020: 0.15 pence);
Adjusted(1) loss per share 0.02 pence (H1 2020: 0.14 pence).
Key Highlights for the Interim Period:
-- Comprehensive agreement with Veative regarding the:
- Acquisition of intellectual property of a dynamic SaaS based
learning management platform and immersive learning content
(including STEM content) to be utilised during the near-term
roll-out of the Company's existing partnership agreement with
Veative and NISA.
- Acquisition of an exclusive one-year IP licencing agreement
for additional immersive learning content for the Indian market
with a call option to acquire both this IP and Veative's global
distributor agreements.
- Proposed acquisition of the entire share capital of Veative's
Indian subsidiary and development centre, subject to the
publication of an FCA approved prospectus.
-- Five-year exclusive partnership agreement with the NISA,
India's largest governing body for budget private educational
institutions representing over 70,000 budget private schools, for
Launchyourcareer.com to be utilised as the platform-of-choice to
deliver a minimum standard of career guidance across NISA
affiliated schools, attended by c.13 million students.
-- Successful delivery of a material EdTech services contract.
Post Period End Highlights:
-- Robust forward momentum across the business.
-- Heads of terms agreed for the acquisition of The
Inspirational Learning Group (TILG) to support delivery of a new
National Career Challenge programme.
-- Launchmycareer.com India:
- Incorporation of Launchmycareer Pvt Limited, a wholly-owned subsidiary of the Group.
- Successful development and deployment of the Group's direct to
consumer offer into Launchmycareer.com - which is now live across
India - and joint marketing activities in collaboration with NISA
have begun.
- First material contract win in India to implement the
Company's immersive careers guidance and STEM-based virtual reality
educational library at schools under central and state governments
in India.
-- First government funded pilot of the platform at a state
school of which there are 1.1m across the country.
-- Agreement for a transformational tactical partnership with
Aldebaron DMCC ("Aldebaron") following the successful
implementation of a material EdTech services contract earlier this
year. Under the Aldebaron agreement Dev Clever will receive a
guaranteed minimum revenue of US$50mn over the next four financial
years, once implemented in full.
-- I nitial 45-day project with The Common Service Centre in
India for the Company's immersive career guidance and learning
platform to go live in 25 academy centres in early July 2021.
Potential to extend the initial project and rollout to all 5,930
Common Service Centre Academies serving over 2.6m students with the
opportunity to expand the service offering to the broader 350,000+
Common Service Centres and their users.
Chris Jeffries, Chief Executive Officer of Dev Clever, said:
"We continue to make material and incremental progress which is
starting to be reflected in our financial performance. Our
innovative Indian partnership and roll-out initiatives with Veative
and NISA remain on track, and we have recently secured both local
and national government contracts. The post period end project with
The Common Service Centre further demonstrates the significant
interest and confidence that our platform is receiving in
India.
"With our substantially increased financial resources we can and
will support accelerated investments in our people, proprietary
content, technology, partnerships, M&A and infrastructure. This
in turn should translate into additional growth already strongly
underpinned by recent contract wins.
" I am particularly excited by the new partnerships with TILG
and Aldebaron substantially extending our proposition and
strengthening our entry into new markets whilst allowing us to
swiftly expand our global user base. We look forward to providing
shareholders with more insights and details shortly after the
completion of the Veative and TILG acquisitions and the entering
into of definitive agreements with Aldebaron".
-ends-
Dev Clever Holdings plc
Christopher Jeffries
Chief Executive Officer and Executive
Chairman
Nicholas Ydlibi
Chief Financial Officer +44 (0) 1827 930 408
Novum Securities Limited - Financial
Adviser & Broker
Colin Rowbury
David Coffman +44 (0) 20 7399 9400
Buchanan Communications
Richard Oldworth / Chris Lane +44 (0) 207 466 5105
Notes to Editors:
Dev Clever Holdings plc, together with its wholly owned
subsidiaries, is a software and technology group based in Tamworth,
United Kingdom, specialising in the use of lightweight integrations
of cloud-based VR and gamification technologies to deliver rich
customer engagement experiences across both the education and
commercial sectors. In January 2019, Dev Clever listed on the
Standard List of the London Stock Exchange. The Group's core focus
is the development and commercialisation of its core platforms -
Educate (its primary focus) and Agency Services (its secondary
focus).
Educate Division:
Through Educate, Dev Clever aims to reduce the global skills
shortage by delivering an enhanced careers guidance service via its
online platform, Launchyourcareer.com, and virtual reality software
(Victar VR). The business has established a global partnership with
Lenovo to rollout its service worldwide, with offerings already on
the market in the UK, US and Canada. Dev Clever is also focused on
the Indian market and has partnered with its National Independent
Schools Alliance (NISA) and content provider Veative to provide a
comprehensive service offering within Indian budget private
schools. Through this, the business has been developing and has
launched a direct-to-consumer offering in India.
Agency Services:
The Company's Agency Services division provides customers from
the retail, brand and hospitality sectors with bespoke application
and customisation of the Group's proprietary cloud-based products
in order to increase consumer engagement, transactional
efficiencies and enhance customer experience within their venues.
The division is being re-branded to Launchmycareer.com Professional
services.
For further information, please visit
www.devcleverholdingsplc.com
Chief Executive's Review
Overview
I am pleased to report Dev Clever's interim results for the six
months ended 30 April 2021. This has again been a busy and hugely
productive period for the Group with the focus now very much on our
Educate division.
In my year-end report I highlighted the opportunities that were
now afforded to the Company through the material equity funding
received primarily from Intrinsic Capital Jersey Limited ("ICJL")
and Sitius Limited ("Sitius"). I am delighted to confirm that the
Company has been able to use this to make further progress on our
growth plans, despite the on-going challenges arising from the
COVID-19 pandemic that continues to impact not only our primary
markets but also our colleagues, business partners and their
families.
Progress in the half year to April 2021
Financing
In the first half year, Dev Clever significantly strengthened
its balance sheet through a series of subscriptions that raised a
total ofGBP18m gross (GBP16.9m net) in new equity funding. Of this
gross amount, GBP2.0m was subject to a deferred settlement, which
was paid by 2 July 2021.
As a result of these subscriptions, ICJL, a wholly owned
subsidiary of AIM-quoted Asimilar Group plc, increased its
shareholding in the Company. In addition, Sitius, an investment
vehicle wholly owned by Dr David vonRosen, also became a
substantial shareholder.
Warrants
Both the ICJL and Sitius subscription agreements contained the
grant of transferable warrants entitling the investors to subscribe
for further equity. As a result, ICJL is entitled to subscribe for
a further 35 million new ordinary shares at 25 pence per share.
Sitius is entitled to subscribe for a further 15 million shares at
25 pence per share and 40 million shares at 50 pence per share.
The recently announced contract with Aldebaron will, subject to
signing of definitive agreement, provide for a grant of a warrant
to subscribe for 60 million shares at 60 pence per share,
exercisable for a period of three years from the date of grant. In
the event that each of ICJL, Sitius and Aldebaron elect to exercise
their warrants in full, the Company would raise a further
GBP68.5m.
The ICJL and Sitius investments have very significantly
strengthened the Company's balance sheet. These provide the
opportunity to support and accelerate the growth of Dev Clever's
core business over the near and mid-term. The Board continues to
pursue future growth and expansion initiatives targeting
opportunities that deliver tangible long-term shareholder
value.
Educate
The Educate division is now the key focus for the Group. The
Group has strengthened its core Educate product team through the
recruitment of Jim Cannon as Chief Product Officer. Jim has joined
the Group following a long career as a Development Executive
working for major television broadcasters in the UK as well as for
Fox in the US. Jim's experience of originating and bringing to life
new formats and concepts for TV audiences is invaluable in leading
the development roadmap for, and gamification of, the Group's
education content and its adaptation for new territories.
North America
The Lenovo agreement remains a key partnership for Dev Clever in
the North American markets with the Group's products,
Launchyourcareer.com and VICTAR VR, pre-installed on Lenovo VR
Classroom devices. In addition, we now have successfully launched
six full pilots of the joint Launchyourcareer.com and Veative
STEM-based learning solution in the US as well as extending our
network of resellers through the introduction of Eduscape and
Douglas Stewart.
India
We were delighted to announce our five-year exclusive
partnership agreement with Veative and NISA, India's largest
governing body for budget private educational institutions. This
partnership results in Dev Clever's Launchyourcareer.com being
utilised by NISA as the platform-of-choice to deliver a minimum
standard of career guidance across its network of 70,000 affiliated
budget private schools and c.13 million students. The partnership
also enables schools to utilise Veative's curriculum-aligned online
learning modules and virtual learning content. Initially a freemium
subscription, the Company will be looking to provide extended
functionality and additional access to career development content
that will enable the Company to offer premium services on both B2B
and direct to consumer models. This will encompass virtual work
experience, curriculum-aligned supplemental educational modules,
interactive language learning modules, self-development and
wellbeing modules, careers networking, and college and course
recommendations.
In working with Veative on developing the broader content plan
for NISA, we identified a number of synergies between our two
companies that culminated in the a nnouncement of a comprehensive
agreement with Veative regarding the:
-- Acquisition of intellectual property of a dynamic SaaS based
learning management platform and immersive learning content
(including STEM content) to be utilised during the near-term
roll-out of the Company's existing partnership agreement with
Veative and NISA.
-- Acquisition of an exclusive one-year IP licencing agreement
for additional immersive learning content for the Indian market
with a call option to acquire both this IP and Veative's global
distributor agreements.
-- Proposed acquisition of the entire share capital of Veative's
wholly owned Indian subsidiary and development centre, subject,
inter alia, to the publication of an FCA approved prospectus.
The prospective acquisition of Veative will enable the Company
to secure the full commercial value of the NISA partnership and
control the future roadmap for the development of our joint
platforms, whilst also enabling the Company to harness the full
development capability of the Veative Offshore Development
Centre.
Material EdTech contract
The Company entered into a material EdTech and services contract
for a proof-of-concept social media platform, linked to the
Launchyourcareer.com platform. The details of this comprehensive
partnership agreement are currently subject to an NDA, which will
expire when this innovative proposition goes live for general
availability. This is expected to occur in the second half of the
2021 calendar year.
Business Advisory and Intelligence Group
The Company formed its Business Advisory and Intelligence Group
("BAIG") in the first half year, chaired by Lord McNicol of West
Kilbride. Members have been appointed for their diverse range of
skills and include the president of NISA and Global Director of
Education at Lenovo, business executives, career guidance
specialists and leaders from educational and youth organisations
such as The Scouts Association. The remit of BAIG is:
-- to support and provide advice to Dev Clever and its
executives regarding the development and global rollout of its
careers guidance platform,
-- to provide thought leadership in the progression of global
careers advice to young people, professionals, institutions,
employers and parents / guiders across the world, and
-- to positively influence the development of careers policy across different countries.
Post period end operational developments
India incorporation
Since the period end, the Group has continued to focus on the
launch of its careers' platforms in India in partnership with
Veative and NISA. The Launchyourcareer.com platform has been
customised for the Indian market and is now available to schools
and pupils through our newly incorporated Indian subsidiary,
Launchmycareer Pte Limited. Sales and marketing teams are now
working with the NISA team to promote and on-board NISA affiliated
schools.
In addition to the progress made with NISA, the Company has
also, in collaboration with its partner Veative, secured its first
material contract in India, valued at US$1.5m, to implement the
Company's immersive careers guidance and STEM-based virtual reality
educational library at schools under central and state governments
in India.
Moreover, the Company secured a government funded pilot to
deploy its innovative platform and virtual reality learning
services into one of India's 1,248 central government KV schools,
that are specifically known for innovation, and can be rolled out
to the rest of the central government school sector subsequently.
The comprehensive pilot will assess the impact within the central
government school system and, if successful, be further rolled out
later in the year. This is an exciting trial and first entry into
the large Indian public school sector, which consists of around 1.1
million schools.
The Inspirational Learning Group ("TILG")
We were pleased to announce that we have entered into heads of
terms for the acquisition of TILG for a cash consideration of
GBP200,000 and the issue of 6,000,000 new ordinary shares in the
Company. The acquisition, if completed, will enable the Company to
utilise the careers programmes developed by TILG, including its
flagship National Enterprise Challenge ("NEC"), to develop its own
National Career Challenge ("NCC"). This will combine the NEC
directly with virtual work experience and assessments in late Q4
2021. The NCC will be available to all students in the UK and will
enable more organisations to deliver bespoke post talent assessment
with immediate work experience programmes using Dev Clever's
proprietary platform. Moreover, young people will be incentivised
to participate in the NCC for the opportunity to gain guaranteed
apprenticeship placements and scholarships provided by the
sponsoring companies.
It is intended that the Company will deliver the NCC programme
in India, where it has a well-established partnership with NISA, in
H1 2022. The Company will also invite all 1.5 million public and
private schools to participate providing the potential to reach c.
280 million students who can participate in what will become known
as the Indian National Career Challenge. The Company expects to use
the Career Challenge initiative to enter additional large emerging
market territories over the next three years.
Material contract extension: Aldebaron
Following on from a successful proof-of-concept, the Company has
recently agreed an extension to the material EdTech contract
entered into in the first half year, with an unnamed client ("the
Client"). With an initial minimum contract value of US$50m over
four financial years to the extent implemented in full, forms the
'go to market education initiative' for the Client and will involve
the Company integrating its careers platforms with the Client's
platform to enable students, brands, employers and educational
institutions to understand, connect, engage and transact. This will
include providing opportunities for students to communicate,
interact and curate with their peers, for example by taking part in
live Q&A from participating companies and in social and
community activities both in the digital and physical world.
Dev Clever, the Client and Aldebaron anticipate that this
bespoke end-to-end solution will provide a transformational and
positively disruptive tool for work experience and recruitment to
manage the longer-term careers for many millions of young
individuals whilst concurrently providing a highly tailored and
inclusive solution for many brands, employers and educational
institutions across the world. The contract will enable the Company
to accelerate the roll out of its core platforms across East Asia
and then the Middle East and North Africa.
Subject to entry into definitive agreements, Aldebaron will
acquire seven million Dev Clever shares at a nominal value during
the period commencing on the date of signing definitive
documentation for the tactical partnership and ending on the expiry
of six months thereafter with an assignable warrant to subscribe
for 60 million of Dev Clever shares at a price of 60 pence per
share, exercisable for a period of three years from the date of
grant.
Initial Project with The Common Service Centre ("CSC") Academy
in India
Dev Clever's wholly-owned Indian subsidiary, Launchmycareer Pvt
Limited and its partner Veative, have entered into an agreement for
an initial project with The Common Service Centre Academy in India.
The Common Service Centre scheme, with more than 350,000 centres
across India servicing tens of millions of users, is a central part
of Digital India, the government's flagship programme which has a
vision to transform India into a digitally empowered society and
economy. Across the 350,000 centres at least 5,930 are dedicated
educational academies (CSC Academies) that provide access to
digital services for over 2.6m students.
The initial pilot project, lasting 45 days, will see the
Company's immersive career guidance and learning platform go live
in 25 academy centres in early July 2021. From this assessment, in
Phase 2 the CSC Academy and the Company have designed the option to
extend the initial project and rollout to all 5,930 CSC Academies.
Should Phase 2 be successful it will provide the Company with the
opportunity to expand the service offer to the broader CSCs and
their users.
Outlook
Tactical direction
The market for EdTech remains robust and we believe there is a
globally growing need and demand for more effective careers
platforms that can engage young people and connect them directly
with their future employers.
Our ultimate ambition is to enable the youth of today to develop
the career skills that are in demand by future employers, alongside
their education, to bridge the critical, growing global skills
gap.
Closing the global skills gap could add US$11.5 trillion to
global GDP by 2028 (Accenture: It's learning, just not as we know
it). Education and training systems need to keep pace with the new
demands of labour markets that are continually challenged by
technological disruption, demographic change and the evolving
nature of work. Moreover, the COVID-19 pandemic has amplified the
skills gap and the need to close it more urgently (McKinsey: May
2020).
Dev Clever's pioneering platform Launchyourcareer.com engages
young people and dynamically matches and connects them through
their interests, skills, personality and personal attributes, to
future employers and incentivises them to develop the skills which
will ensure they can be employed in the future.
Through the Company's exclusive strategic and tactical
partnerships with Lenovo, NISA and Aldebaron, the funding that has
been secured and combined with the enlarged capabilities of Veative
Labs and TILG, we are now able to go to market at scale and attract
many millions of users to our platform globally.
We believe that the creation of the Careers Challenge announced
in June 2021, driven by our innovative approach to youth engagement
and making careers discovery fun and rewarding from Year 6 to Year
13, has the potential to be unprecedented in its innovative ability
to bridge the skills gap. We expect that this will become the
cornerstone of our inter-connected careers guidance eco-system,
enabling us to appeal to companies from all over the world to
showcase their businesses and sectors of industry through the lens
of a student, demystifying the world of work and connecting
students with employers via Virtual Encounters and live webinars.
This will be augmented by social network peer support and powerful
engagement tools to gamify the careers journey with opportunities
to explore curriculum-aligned learning in a radically different
approach to education, and to level-up skillsets to prepare for,
and become better-aligned to career goals. This will all be
recorded in a comprehensive skills and career passport that
reflects each students' development, growth and motivation.
Virtual work experiences will be available where young people
can then demonstrate their developed skills and employability for
future employers to grant apprenticeship placements and provide
guaranteed jobs. Companies can, in turn, receive analytics that
will help them reach candidates that are the best fit for their
future opportunities.
Agency Services
In addition to maintaining existing customer relationships, the
Group's Agency Services division is being re-branded to
Launchmycareer.com Professional Services. The wealth of experience
we have acquired over the years of providing hundreds of digital
consumer and employee engagement experiences for global brands,
businesses and educators via our proprietary platform Engage can
now, through the NCC competition , be focused on delivering
engaging virtual work experience programmes as we start to on-board
businesses, brands and employers globally.
Summary
The first half year has seen the Company continue to make
significant progress, securing its near-term financial requirements
and accelerating the planned growth into the Indian market in
partnership with Veative and NISA. The agreements with TILG and
Aldebaron provide fresh impetus for the Group, providing further
content and functionality that will improve both the user
demographic and user engagement for our Educate products.
I am further encouraged by our improved financial performance
and the recent contract wins, that demonstrate the ability of the
Company to commercialise its core EdTech platforms. As a result,
the Board believes the Company is very well placed to exceed
management's expectations for the full year ending 31 October
2021.
Finally, and on behalf of the entire Board, I would like to
thank our clients, stakeholders and all our employees for their
on-going support and commitment during these unprecedented times
for all.
Christopher Jeffries
Chairman & Chief Executive Officer
5 July 2021
Principal Risks and Uncertainties
The Board regularly monitors exposure to key risks, such as
those related to its competitive position relating to sales, cash
position and productivity. It has also taken into account the
economic situation facing its core markets in the light of COVID-19
and the impact this continues to have on demand.
COVID-19 continues to have a significant impact on many
companies across the globe. Our colleagues continue to work
remotely to ensure their and others' safety. However, productivity
within the Group has been maintained as:
-- the Group has established robust communication channels; and
-- our employees have remained dedicated and professional throughout this difficult period
Whilst we believe that the global COVID-19 pandemic has
continued to suppress short-term demand, the Group is seeing signs
of an uplift in activity with educators and employers expressing a
renewed interest in the Group's remote and immersive applications
and solutions across a number of territories. We remain confident
that the Group's careers platforms Launchourcareer.com and VICTAR
VR are ideally placed to support the requirements of remote working
and the Group has made excellent progress in ensuring the platform
is available to those who want to use it across multiple
territories.
Capital structure, cash flow and liquidity.
The Directors continuously monitor the cash flow requirements of
the Group to ensure the Group has access to the funds required to
finance its operations. Following the successful subscriptions from
Intrinsic Capital (Jersey) Limited, One Nine Two Pte Limited and
Sitius, the Group has secured net new investment of GBP16.9 million
and is now funded primarily through equity. The directors believe
that the equity headroom available to the Company together with the
strengthening of the share price and the existing shareholder
warrants, provide the necessary access to additional funds should
they be required.
Regulatory compliance
The Group's expansion into India and the potential to enter into
further international markets exposes the Group to new and
potentially different regulatory regimes. Failure to understand and
comply with these requirements may expose the Group to regulatory
penalties and / or excessive tax burden. The Group has responded to
this challenge through the formation of commercial partnerships
with partners that are already established within their respective
markets. The Group has also expanded upon its network of
professional advisers with expertise within their respective
territories and will seek to utilise this resource as required in
the future.
Financial Review
-- Revenue up 531% at GBP2,4m for the Period (H1 2020: GBP383k
for 6 months to 30 April 2020), in line with management
expectations and supported by significant contract wins in the
Educate division.
-- EBITDA loss was GBP162k (H1 2020: loss GBP561k), with an
adjusted positive EBITDA of GBP41k (HY 2020: loss GBP517k),
reflecting contribution from the new contracts within Educate
partially offset by an increased cost base as the business scaled
its sales, marketing and administrative resources to support its
accelerated growth. The primary cost driver for the Group remains
salary and associated people costs, currently approximately GBP220k
per month.
-- Loss after tax was GBP294k, (HY 2020: loss of GBP584k)
-- Net increase in cash and cash equivalents GBP8,65m reflecting
the receipt of GBP15m of net proceeds from the issue of equity.
This has been partially offset by the acquisition of intellectual
property assets of GBP4,407k, software development expenditure of
GBP972k and net cash outflow from operating activities GBP893k,
reflecting the increase in working capital following delivery of
Educate contracts.
-- At 30 April 2021, the Group has a net cash position of
GBP9,676k (Hy 2020: GBP473k), with deferred proceeds of GBP1.9m
settled post period end. Current cash balances stand at
GBP10.85m.
Nicholas Ydlibi
Chief Financial Officer
5 July 2021
RESPONSIBILITY STATEMENT
Directors' Responsibility Statement
The Directors confirm that this consolidated interim financial
information has been prepared in accordance with International
Accounting Standard 34 (IAS 34) as adopted by the European Union
and that the interim report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely:
-- an indication of important events that have occurred during
the first six months of the financial year (being six months from
the financial year end, 31 October 2020) and their impact on the
condensed set of consolidated financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- material related-party transactions in the first six months
and any material changes in the related party transactions
described in the last Annual Report.
By order of the Board
Christopher Jeffries
Chairman & Chief Executive Officer
5 July 2021
Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2021
Unaudited Unaudited
Six months Six months
to 30 April to 30 April
2021 2020
Note GBP GBP
Continuing operations
Revenue 9 2,412,442 382,554
Cost of sales (834,415) (227,025)
Gross profit 1,578,027 155,529
Administrative expenses (1,851,813) (768,728)
Loss from operations (273,786) (613,199)
Fair value gains on equity investments - 36,695
Finance income - 82
Finance expense (23,267) (20,302)
Loss before tax (297,053) (596,724)
Tax credit 3,546 1,694
Loss for the period from continuing
operations (293,507) (595,030)
Other comprehensive income:
Items that may be reclassified to
profit or loss in subsequent periods:
- -
Total other comprehensive income - -
for the period
Total comprehensive income for the
period attributable to shareholders (293,507) (595,030)
------------- -------------
Earnings per share
Basic and diluted earnings (pence
per share) 4 (0.06) (0.15)
Adjusted basic and diluted earnings
(pence per share) 4 (0.02) (0.14)
Consolidated Statement of Financial Position
At 30 April 2021
Unaudited Unaudited Audited
as at as at as at
30 April 30 April 31 Oct
2021 2020 2020
Note GBP GBP GBP
Non-Current Assets
Goodwill 6 240,145 283,815 240,145
Intangible Assets 6 6,112,629 335,232 818,723
Property, Plant & Equipment 95,197 119,124 105,481
Financial assets at fair
value through profit or loss 138,653 67,820 138,653
------------ ------------ ------------
6,586,624 805,991 1,303,002
Current Assets
Inventories 6,370 10,850 2,650
Trade and other receivables 7 4,170,014 224,936 1,132,018
Cash and cash equivalents 9,675,958 472,798 1,032,473
------------ ------------ ------------
13,852,342 708,584 2,167,141
Total Assets 20,438,966 1,514,575 3,470,143
Current Liabilities
Trade and other payables (609,726) (322,589) (345,071)
Deferred income (153,559) (210,145)
Loans and borrowings (91,923) (105,641) (90,583)
------------ ------------ ------------
(855,208) (428,230) (645,799)
Non-current liabilities
Loans and borrowings (286,689) (367,729) (318,681)
Deferred tax (22,320) (29,411) (25,866)
------------ ------------ ------------
(309,009) (397,140) (344,547)
Total liabilities (1,164,217) (825,370) (990,346)
Net Assets 19,274,749 689,205 2,479,797
------------ ------------ ------------
Share capital 8 5,935,842 4,357,583 4,712,197
Share premium 8 17,640,775 238,248 1,977,447
Merger reserve (2,499,900) (2,499,900) (2,499,900)
Other reserves 524,723 362,574 323,237
Retained income (2,326,691) (1,769,300) (2,033,184)
19,274,749 689,205 2,479,797
------------ ------------ ------------
Consolidated Statement of Changes in Equity
At 30 April 2021
Share Merger Share premium Other Retained Total
capital reserve reserves income
GBP GBP GBP GBP GBP GBP
Balance at 1 November
2019 3,884,017 (2,499,900) 246,246 110,212 (1,174,270) 566,305
Loss after taxation
for the period - - - - (595,030) (595,030)
---------- ------------ -------------- ---------- ------------ ------------
Total comprehensive
loss for the period - - - - (595,030) (595,030)
Issue of ordinary
shares 473,566 - 48,214 - - 521,780
Share issue costs - - (56,212) - - (56,212)
Share option issues 101,731 - 100,731
Equity component
of convertible loan - - - 151,631 - 151,631
---------- ------------ -------------- ---------- ------------ ------------
473,566 - (7,998) 252,362 - 717,930
Balance at 30 April
2020 4,357,583 (2,499,900) 238,248 362,574 (1,769,300) 689,205
---------- ------------ -------------- ---------- ------------ ------------
Balance at 1 November
2020 4,712,197 (2,499,900) 1,977,447 323,237 (2,033,184) 2,479,797
Loss after taxation
for the period - - - - (293,507) (293,507)
---------- ------------ -------------- ---------- ------------ ------------
Total comprehensive
loss for the period - - - - (293,507) (293,507)
Issue of ordinary
shares 1,223,645 - 17,016,356 - - 18,240,000
Share issue costs - - (1,353,028) - - (1,353,027)
Share option issues - - - 201,486 - 201,486
---------- ------------ -------------- ---------- ------------ ------------
1,223,645 - 15,663,328 201,486 - 17,088,459
Balance at 30 April
2021 5,935,842 (2,499,900) 17,640,775 524,723 (2,326,691) 19,274,749
---------- ------------ -------------- ---------- ------------ ------------
Consolidated Statement of Cash Flows
For the six months ended 30 April 2021
Unaudited Unaudited
Six months Six months
to to 30 April
30 April 2020
2021
GBP GBP
Cash flows from operating activities:
Loss before tax (297,053) (596,724)
Adjustments for:
Depreciation 26,935 27,412
Amortisation of intangibles 85,111 24,921
Fair value gains - (36,695)
Finance income - (82)
Finance expense 23,267 20,302
Non-cash element of share-based
payments 201,486 43,735
Increase decrease in inventories (3,720) (400)
Increase in trade and other receivables (1,106,445) (46,298)
Increase in trade and other payables 108,069 31,825
Income tax received 68,455 -
-------------------------- -------------
Net cash flows from operating activities (893,895) (532,004)
Cash flows from investing activities:
Payments to acquire property, plant,
and equipment (16,655) (18,831)
Payments to develop intangible assets (5,379,017) (127,821)
Payments to acquire financial assets
at fair value through profit or
loss - (30,000)
Acquisition of Phenix Digital - (50,000)
-------------------------- -------------
Net cash flows used in investing
activities (5,395,672) (226,652)
Cash flows from financing activities
:
Net proceeds from issue of equity 14,986,972 381,639
Proceeds from borrowings - 402,247
Repayment of borrowings (45,814) (37,335)
Interest received - 82
Interest paid (8,106) (11,886)
-------------------------- -------------
Net cash flows from financing activities 14,933,052 734,747
Net increase/(decrease) in cash
and cash equivalents in the year 8,643,485 (23,909)
Cash and cash equivalents at beginning
of period 1,032,473 496,707
-------------------------- -------------
Cash and cash equivalents at end
of period 9,675,958 472,798
-------------------------- -------------
Cash and cash equivalents 9,675,958 472,798
-------------------------- -------------
Notes to the Interim report
1 Basis of preparation
The consolidated interim financial statements have been prepared
in accordance International Financial Reporting Standards
in conformity with the requirements of the Companies Act
2006 and expected to be effective at the year-end of 31 October
2021.
The accounting policies are unchanged from the financial
statements for the year ended 31 October 2020. The interim
financial statements, which have been prepared in accordance
with International Accounting Standard 34 (IAS 34), are unaudited
and do not constitute statutory accounts within the meaning
of section 434 of the Companies Act 2006. Statutory accounts
for the year ended 31 October 2020, prepared in accordance
with IFRS, have been filed with Companies House. The Auditors'
Report on these accounts was unqualified, did not include
any matters to which the Auditors drew attention by way of
emphasis without qualifying their report and did not contain
any statements under section 498 of the Companies Act 2006.
The consolidated interim financial statements are for the
six months to 30 April 2021. The interim consolidated financial
information does not include all the information and disclosures
required in the annual financial statements and should be
read in conjunction with the Group's annual financial statements
for the year ended 31 October 2020, which were prepared in
accordance with IFRS's and in conformity with the requirements
of the Companies Act 2006. The Group's business is not subject
to seasonal variations.
The condensed interim statements have been prepared under
the going concern assumption, which presumes the Group will
be able to meet its obligations as they fall due for the
foreseeable future. The Group has successfully raised GBP16.9m
of new equity (net) over the first half year. Following the
acquisition for GBP4.4m of intellectual property from Veative
Labs Pte Limited (Singapore), cash balances at 30 April were
GBP9.7m and exclude deferred share consideration of GBP1.9m
net that was received by 2 July 2021.
To support the going concern conclusion, the Group has prepared
cash flow forecasts to 31 October 2023 which show positive
cash headroom is maintained. The forecast assumes that the
Group completes its intended acquisition of Veative and increases
the level of investment in the development and marketing
of its global EdTech careers and STEM based learning platforms.
Given the ability of management to restrict this additional
investment, should expected revenues not materialise, the
Directors consider it appropriate to prepare interim financial
statements on a going concern basis.
2 Summary of significant accounting policies
New standards, interpretations and amendments adopted by
the Company
No new standards or amendments have been adopted for the
first time in these financial statements. However, the following
policies have been adapted in respect of new types of transaction
in the period.
Share based payments
The costs of equity settled transactions are measured at
their fair value at the date at which they are granted. The
cost of advisor warrants is recognised at the grant date
as they are issued in respect of services already received.
The cost of equity settled transactions with employees is
charged to the income statement as an expense over the vesting
period, on a straight-line basis, which ends at the date
on which the relevant employees become fully entitled to
the award. Non-market vesting conditions are taken into consideration
by adjusting the numbers of options expected to vest, at
each statement of financial position date, such that the
cumulative charge recognised over the vesting period is based
on the number of options that eventually vest. Market vesting
conditions are factored into the fair value of the options
granted. The cumulative expense is not adjusted for failure
to achieve a market vesting condition. The movement in cumulative
expense since the previous reporting date is recognised in
the statement of comprehensive income within administration
expenses with a corresponding entry in the statement of financial
position in the relevant share-based payment reserve.
Fair value is determined using the Black-Scholes model, details
of which are given in note 4 Share based payments.
Share warrants that are not granted in exchange for the provision
of goods or services are accounted for in accordance with
IAS 32 Financial Instruments. Where the number of shares
under warrant and the associated consideration are both fixed,
the warrants are accounted for as equity instruments, with
any consideration received for the instruments being credited
to equity.
Purchased intellectual property and distribution rights
Purchased intellectual property and distribution agreements
are recognised as intangible assets and are valued at their
purchase price and amortised over the remaining useful life
of the asset. Intellectual property is amortised over periods
between 3 and 10 years and distribution agreements over the
residual contract term, typically between one and three years.
At each balance sheet date, the Company reviews the carrying
amounts of its assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any).
3 Critical accounting estimates and judgements
Licence acquisition
On 12 April 2021, the Group announced a comprehensive agreement
with Veative Labs Pte Limited (Singapore) including the acquisition
of an exclusive one-year licence for the use of certain parts
of Veative's intellectual property and immersive learning
assets at a cost of $2.6m (GBP1.9m). At the same time, the
Company also obtained a call option, exercisable over a period
of one year, to acquire the full rights to this IP and associated
immersive learning materials.
The Directors considered the accounting treatment of the
one-year licence and concluded that in light of the Company's
intention to exercise its call option over the acquisition
of the full rights and associated materials, that the licence
payment represented a deposit payment towards the full acquisition.
As such, the Directors have capitalised the licence payment
within intangible assets, under patents, trademarks and other
rights.
Further detail can be found in note 6, Intangible assets
4 Share Based Payments
Share payments to advisers
During the period to 30 April 2021, the Company issued 2,364,395
new 1p ordinary shares to its brokers in lieu of brokerage
fees relating to the introduction of potential investors
to the Company, specifically in connection with the remaining
tranches of the ICJL subscription. The valuation of the share-based
payment was established with reference to the standard commission
rate charged by the broker. An effective commission rate
of 3% has been applied to value the payment being the difference
between the broker's standard commission rate of 6% of gross
funds raised less the value of other commissions paid of
3%.
Total gross funds raised through the ICJL subscription, and
subsequent partial novation to Sitius, of GBP8.0 million
resulted in a charge of GBP0.24 million, which has been recognised
in share premium as a direct cost of the associated fundraise.
Share-based payment schemes with employees
During the period ended 30 April 2021, 4,000,000 share options
were awarded to key management personnel under the Company's
EMI share option plan. The options have an exercise price
of GBP0.10 per share and vest, subject to continued service
by the employee, over a period of 36 months. The options
expire at the end of a period of 10 years from the Grant
Date of 30 November 2030 or on the date on which the option
holder ceases to be an employee.
Investor Warrants
On 23 March 2021, the Company granted warrants over 35,000,000
shares to ICJL and 15,000,000 shares to Sitius on completion
of the modified ICJL investment agreement. The warrants have
an exercise price of GBP0.25 and are exercisable for a period
of 24 months from the completion date.
On 6 April 2021, the Company granted warrants over 40,000,000
shares to Sitius on completion of the second tranche of its
investment agreement. The warrants have an exercise price
of GBP0.50 and are exercisable for a period of 24 months
from the completion date.
The warrants have been valued as equity instruments under
IAS 32.
During the period the Company was required to recognise a
total expense of GBP201,486 (HY 2020: GBP43,735) in the income
statement in respect to share options and warrants in issue
or committed to issuing at the end of the reporting period.
The table below represents the weighted average exercise
price (WAEP) of and the movements in share options and warrants
during the period:
30 Apr 2021 WAEP 30 Apr 2020 WAEP
No. options No. options
and warrants and warrants
Outstanding at beginning
of period 29,392,266 1.17 29,782,065 1.00
Issued in period 94,000,000 35.00 7,420,637 1.84
Lapsed during period (2,220,995) 9.10 (662,983) 1.00
Exercised during the period - - - -
-------------- ------ -------------- -----
Outstanding at the end of
the period 121,171,271 27.72 36,539,719 1.17
Exercisable at the end of
the period 102,882,866 31.73 18,359,241 1.11
The Company has measured the fair value of the services received
as consideration for equity instruments of the Company, indirectly
by reference to the fair value of the equity instruments.
The table below sets out the options and warrants that were
issued during the period and the principal assumptions used
in the valuation.
Type Investor Investor Key management
warrant warrant
Grant Date 23 Mar 2021 6 April 30 November
2021 2020
Number of options/warrants 50,000,000 40,000,000 4,000,000
Share price at grant date GBP0.375 GBP0.365 GBP0.076
Exercise price at grant GBP0.25 GBP0.50 GBP0.10
date
Risk free rate n/a n/a 0.84%
Option life 2 years 2 years 3 years
Expected volatility n/a n/a 101.72
Expected dividend yield n/a n/a 0%
Expected redemption n/a n/a 100%
Fair value per option / n/a n/a GBP0.066
warrant at grant date
5 Earnings per share
Unaudited Unaudited
Six months Six months
to 30 April to 30 April
2021 2020
Basic and diluted earnings attributable
to equity holders of the Group
Continuing operations (293,507) (595,030)
Weighted average number of shares for
Basic EPS 504,596,483 406,248,163
Earnings per share from continuing operations
(pence) (0.06) (0.15)
Adjusted basic and diluted earnings attributable
to equity holders of the Group:
Continuing Operations (92,021) (551,295)
Weighted average number of shares for
Basic EPS 504,596,483 406,248,163
Adjusted earnings per share from continuing
operations (pence) (0.02) (0.14)
The diluted earnings per share equals the basic earnings
per share due to the loss position of the Group. The adjusted
loss is calculated after adjusting for non-recurring one-off
expenditure associated with the placing and the costs of
the and the costs of the warrants and options granted in
the period.
Earnings attributable to equity holders
of the Group (293,507) (595,030)
Share-based payment - share
options 201,486 27,447
Share-based payments - share
warrants - 16,288
Adjusted earnings attributable to equity
holders of the Group (92,021) (551,295)
------------- ---------------
6 Intangible assets Goodwill Customer Patents, Internal Total
contracts Trademarks use software
and other
rights
GBP GBP GBP GBP GBP
Cost
At 1 November
2019 - - 3,682 339,283 342,965
Acquired on acquisition 283,815 74,659 - - 74,659
Additions - - - 127,821 127,821
--------- ----------- ------------ -------------- ----------
At 30 April 2020 283,815 74,659 3,682 467,104 545,445
Amortisation
At 1 November
2019 - - - (185,292) (185,292)
Charge for period - (3,111) - (21,810) (24,921)
--------- ----------- ------------ -------------- ----------
At 30 April 2019 - (3,111) - (207,102) (210,213)
Cost
At 1 November
2020 240,145 74,659 3,682 1,025,421 1,103,762
Additions - - 4,406,608 972,409 5,379,017
--------- ----------- ------------ -------------- ----------
At 30 April 2021 240,145 74,659 4,410,290 1,997,830 6,482,779
Amortisation
At 1 November
2020 - (21,776) - (263,263) (285,039)
Charge for the
period - (18,665) - (66,446) (85,111)
--------- ----------- ------------ -------------- ----------
At 30 April 2021 - (40,441) - (329,709) (370,150)
Net book value
At 30 April 2021 240,145 34,218 4,410,290 1,668,121 6,112,629
At 30 April 2020 283,815 71,548 3,682 260,002 335,232
Goodwill and the customer relationship intangible assets
held by the Group arose on the acquisition of Phenix Digital,
which completed on 13 March 2020.
The Company's internally developed software relates to its
LYC and VICTAR VR careers education platform, the associated
CLEVER suite of intranet products and digital customer loyalty
applications. The pace of development has increased over
the first half year with the customisation of the platforms
for the launch of LYC in India and includes the development
of both additional content and the direct-to-consumer commercial
platform.
On 12 April 2021, the Group announced a comprehensive agreement
with Veative Labs Pte Limited (Singapore) including:
* the planned acquisition of its wholly owned Indian
subsidiary Veative Labs Pvt Limited
* acquisition of the Veative STEM based learning
platform, and its associated IP, required for the
near-term roll-out of the Company's existing
partnership agreement with Veative and the National
Independent Schools Alliance in India at a cost of
$3.4m (GBP2.5m)
* exclusive one year licence for the use of additional
immersive learning materials bespoke to the Indian
market at a cost of $2.6m (GBP1.9m)
* call option over a period of one year to acquire the
full rights to the additional immersive learning
materials and all Veative's global distribution
agreements at a cash consideration of $6.5m if the
call option is exercised.
As it is currently the intention that the Company will exercise
its option to acquire the remaining IP rights to Veative's
additional immersive learning materials, the initial one-year
licence fee has been classified as a deposit towards taking
up the option and the associated cost has been capitalised
within patents, trademarks and other rights.
An impairment review was carried out at the balance sheet
date. No impairment arose.
7 Trade and other receivables
Unaudited Unaudited
Six months Six months
to 30 April to 30 April
2021 2020
GBP GBP
Trade receivables 1,484,156 131,189
Less: Provision for impairment
of trade receivables (450)
--------------- ---------------
1,483,706 131,189
Prepayments 207,370 61,543
Accrued income 300,000 -
Income taxes 66,951 16,402
Taxation and social security 108,013 15,802
Other receivables 2,003,974 224,936
--------------- ---------------
4,170,014 224,936
--------------- ---------------
Other receivables include GBP2.0m in respect of outstanding
proceeds from the final tranche of the Sitius subscription
dated 6 April 2021 (see note 8 Share capital). These proceeds
were received by 2 July 2021. The associated broker commission
GBP0.1m has been accrued within trade and other payables.
Maturity analysis of unimpaired trade At 30 April
receivables: 2021
Amounts overdue at the period
end 390,024
Amounts due within one month 513,105
Amounts due between one month and two
months 176,456
Amounts due between two and three months 189,441
Amounts due between three and four months 71,560
Amounts due between four and five months 71,560
Amounts due between five and six months 71,560
1,483,706
---------------
All overdue balances as at 30 April 2021 have been settled
since the period end. The maturity analysis reflects a combination
of the standard commercial payment terms that operate within
the hospitality sector serviced through Agency Services
and extended credit terms that have been negotiated as part
of material licencing agreements within Educate.
8 Share capital Shares Share capital Share premium
No. GBP GBP
At 1 November 2020 471,219,794 4,712,197 1,977,447
Ordinary shares of GBP0.01
issued on 25 January 2021 at
GBP0.10 20,000,000 200,000 1,800,000
Ordinary shares of GBP0.01
issued on 25 January 2021 at
GBP0.00 591,099 5,911 54,089
Ordinary shares of GBP0.01
issued on 22 February 2021
at GBP0.20 20,000,000 200,000 3,800,000
Ordinary shares of GBP0.01
issued on 23 March 2021 at
GBP0.10 60,000,000 600,000 5,400,000
Ordinary shares of GBP0.01
issued on 23 March 2021 at
GBP0.00 1,773,296 17,733 162,267
Ordinary shares of GBP0.01
issued on 22 April 2021 at
GBP0.30 20,000,000 200,000 5,800,000
Share issue expenses (1,353,028)
At 30 April 2021 593,584,189 5,935,841 17,640,775
------------ -------------- --------------
On 25 January 2021, the Group issued 20 million new Ordinary
shares of 1p to Intrinsic Capital (Jersey) Limited at 10p
per share, raising gross proceeds of GBP2.0 million through
a subscription. This subscription formed the second tranche
of the subscription agreement entered into by the Company
with Intrinsic on 13 May 2020. The Group also issued 591,099
new shares to its brokers in lieu of brokerage fees relating
to the introduction of potential investors to the Company.
On 2 February 2021 the Group announced a further equity
subscription agreement with One Nine Two Pte Limited. The
agreement provided for an initial subscription of 20 million
new ordinary shares in Dev Clever at a subscription price
of 20p per share to raise gross proceeds of GBP4.0 million,
conditional upon approval at a general meeting of the Company
to an increase in the authority granted to the Directors
to allot shares and disapply pre-emption rights. The agreement
provided for a further subscription of 20 million ordinary
shares at an exercise price of 30 pence per share to raise
gross proceeds of GBP6.0 million to be completed automatically
once the share price of the Group closed at or above 34p
per share for a period of 5 consecutive days. The Company
also granted One Nine Two Pte Limited a warrant over 40
million new ordinary shares at an exercise price of 50p
per share, subject to completion of the further subscription.
The warrant is exercisable in whole or in part at any time
until the second anniversary of the completion of the first
subscription.
Following the passing of the relevant resolution at the
general meeting, on 22 February 2021, the Group issued 20
million new Ordinary shares of 1p to One Nine Two Pte Limited
at 20p per share, raising gross proceeds of GBP4.0 million.
On 25 February 2021, the Company announced the novation
of the subscription agreement with One Nine Two Pte Limited
in favour of Sitius, an investment vehicle wholly owned
by Dr David vonRosen. On the same date, ICJL entered into
an agreement with Sitius to assign 30 million of its remaining
subscription rights to 60 million new ordinary shares in
the Company at an exercise price of 10p per share
ICJL and Sitius completed their subscriptions to these shares
on 23 March 2021, following the publication of the Company's
prospectus on 17 March, raising gross proceeds of GBP6.0
million. The Group also issued 1,773,296 new shares to its
brokers in lieu of brokerage fees relating to the introduction
of potential investors to the Company.
On 26 March 2021, the mid-market price of the Company's
ordinary shares closed at or above 34 pence for five consecutive
days, satisfying the remaining condition for Sitius to complete
its subscription. Following the publication of the Company's
supplementary prospectus, on 22 April 2021, the Company
issued 20 million new Ordinary shares of 1p to Sitius at
30p per share, raising gross proceeds of GBP6.0 million.
At 30 April 2021, proceeds of GBP2,000,000 remained outstanding
(see note 7 Trade and other receivables). These were received
by the Company by 2 July 2021.
9 Segmental analysis
As reported in the FY 2020 Annual Report, the Group is now
primarily focussed on the deployment of its resources on
Its Educate business and its core EdTech platform, Launchyourcareer.com.
As a result, the chief operating decision maker, being the
Board of Directors, now considers the Group to have a single
Educate focus.
Period ended 30 April 2021
Educate Agency Services Total
GBP GBP GBP
Revenue by type:
Development and set up fees 1,536,748 296,158 1,832,906
Subscription, hosting and support
fees 479,635 99,891 579,526
------------- ------------------- ----------
2,016,383 396,049 2,412,432
------------- ------------------- ----------
Period ended 30 April 2020
Educate Agency Services Total
GBP GBP GBP
Revenue by type:
Development and set up fees 16,323 283,274 299,597
Subscription, hosting and support
fees 43,643 39,314 82,957
------------- ------------------- ----------
59,966 322,588 382,554
------------- ------------------- ----------
Revenue in the six months to 30 April 2021 has been supported
by material contract wins within Educate. Educate revenues
accounted for 83.6% of total revenue in the period (H1 2020:
15.7%).
[1] Adjusted loss per share is after adjusting for the impact of
share-based payments.
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END
IR BZLLBFDLXBBV
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July 05, 2021 02:00 ET (06:00 GMT)
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