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StatPro Group PLC  -  SOG   

Interim results

Released 07:00 02-Aug-2017

RNS Number : 8183M
StatPro Group PLC
02 August 2017
 

2 August 2017

 

StatPro Group plc                

 

Revenue and profit growth through cloud investment

 

StatPro Group plc, (AIM: SOG, "StatPro", "the Group"), the leading provider of portfolio analysis and asset pricing services for the global asset management industry, has published its interim results for the six months ended 30 June 2017. 

 


Six months ended 30 June 2017

Six months ended 30 June 2016

% change


Revenue

£21.62 m

£17.55 m

+23%


Annualised Recurring Revenue ("ARR") (1)

£53.19 m

£36.17 m

+47%


Adjusted EBITDA (2)

£2.78 m

£2.05 m

+35%


Loss before tax

£(2.29) m

£(0.96) m



Free cash flow

£3.52 m

£(2.44) m



Loss per share - basic

 (3.3)p

 (1.2)p



Earnings per share - adjusted (2)

1.8p

1.1p

+64%


Interim dividend per share

0.85p

0.85p

-


 

Financial highlights:

·      Group revenue up 23% to £21.62 million (2016: £17.55 million)

Organic growth in revenue 2% (2016: nil)

Currency impact on revenue 11% (2016: 2%)

·      Adjusted EBITDA increased by 35% to £2.78 million (2016: £2.05 million)

·      Loss before tax of £2.29 million (2016: £0.96 million) after acquisition and restructuring costs and other non-cash adjustments

·      Interim dividend maintained at 0.85 pence per share

·      Free cash flow in H1 2017 increased to £3.52 million (2016: outflow of £2.44 million)

 

Operating highlights:

·      StatPro Revolution organic revenue growth of 16% (2016: 62%)

·      Completed acquisition of UBS Delta - risk and performance analytics service for approx. €13 million (£11.2 million) in cash, paid over three years.

UBS Delta extends risk and performance analytics service from middle office to front office of asset managers

Acquisition phased over three to five years as StatPro incorporates UBS Delta's functionality into flagship product, StatPro Revolution

Integration progressing to plan

·      Software as a service (SaaS) as a percentage of software now 82% (2016: 74%)

·      Multi-currency financing facility with Wells Fargo increased to £41.0 million

(1) Annualised Recurring Revenue is the annual value of revenue contractually committed at period end.  

(2) Adjusted EBITDA and adjusted earnings/losses per share are EBITDA and earnings/losses per share after adjustment for amortisation of acquired intangible assets, acquisition transaction, redundancy and other integration costs, fair value movement on non-controlling interest put option and share based payments (notes 2 and 5).

 

Justin Wheatley, Chief Executive of StatPro, commented:

 

"Our underlying profitability has seen a solid improvement in H1 2017 and the recently acquired Delta business has significantly boosted our recurring revenues - a key metric for the business. Our ARR is now £53.19 million, up some 47% from this time last year.

 

"The acquisition of Delta was a major development for us. This business transforms our scale and significantly enhances our product capabilities.  Our focus is now on maintaining the service for Delta clients, whilst migrating Delta's unique functionality onto StatPro Revolution's platform.

 

"Our journey to transform StatPro into a SaaS business is largely complete, with over 82% of our software revenues coming from our cloud services. We expect to improve our margins at all levels as we benefit from the enhanced scale provided by Delta, our solid organic growth and the operational gearing inherent in a cloud-based business." 

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR).

 

A presentation for analysts of the interim results will be held at 9.30am today at the offices of Instinctif Partners, 65 Gresham Street, London, EC2V 7NQ.

 

Enquiries:

 

StatPro Group plc



 

Justin Wheatley, Chief Executive


+44 (0) 20 8410 9876

Andrew Fabian, Finance Director  






Panmure Gordon - Nomad and Broker



Corporate Finance - Freddy Crossley / Fabien Holler


+44 (0) 20 7886 2500

Corporate Broking - Tom Salvesen






Instinctif Partners



Adrian Duffield / Kay Larsen / Chris Birt


+44 (0) 20 7457 2020

 

About StatPro

 

StatPro is a global provider of award winning portfolio analytics solutions for the investment community. The Group's cloud-based platform provides vital analysis of portfolio performance, attribution, risk and compliance. This multi-asset class analytics platform helps StatPro's clients increase assets under management, improve client service, meet tough regulations and reduce costs.

 

The Group's integrated and global data coverage includes over 3.2 million securities such as equities, bonds, mutual funds, FX rates, futures, options, OTCs, sector classifications and much else besides. StatPro also covers most families of benchmarks including MSCI, FTSE, Russell, NASDAQ and the open source Freedom Index.

 

The Group has operations in Europe, North America, South Africa, Asia and Australia, with hundreds of clients in 39 countries around the world.

 

StatPro has grown its Annualised Recurring Revenue from less than £1 million in 1999 to around £53 million today. Over 75% of recurring revenues are generated outside the UK. StatPro Group plc shares are listed on AIM.

 

Overview

 

The first half of the year saw a strong improvement in adjusted EBITDA, rising 35% to £2.78 million (2016: £2.05 million) with H1 revenues up 23% to £21.62 million (2016: £17.55 million).

 

ARR, which highlights the Group's strategy of growing recurring revenue contracts, increased by 47% to £53.19 million (2016: £36.17 million) over the last 12 months.

 

Excluding the effect of the acquisition of Delta, revenues rose 13% and the operating profit was £0.62 million (2016: loss £0.60 million). Free cash flow increased to £3.52 million from a £2.44 million cash outflow. The Group has maintained the dividend at 0.85p.

 

StatPro is now truly cloud-based and firmly established as one of the leading services for the portfolio analytics market. 82% of the Group's software ARR is now from SaaS.

 

The highlight of the first half was the acquisition of Delta from UBS for approximately €13 million (£11.2 million) in cash, paid over three years. Delta will enable StatPro to extend its risk and performance analytics service from the middle office to the front office of asset managers.

 

The acquisition of Delta is phased over three to five years as StatPro incorporates Delta's functionality into its flagship product, StatPro Revolution. Throughout the transition, and until StatPro has fully integrated Delta's functionality, UBS will continue to operate and support Delta for its clients.

 

Investor Analytics (now known as Alpha), acquired in 2016, is being integrated into the Group's flagship cloud platform, StatPro Revolution.

 

These two acquisitions provide the Group with considerably enhanced capabilities, functionality and the ability to address a wider number of portfolio risk and performance segments.

 

The Group will continue to consider making acquisitions to widen its customer base and/or increase its product portfolio.

 

Current trading and outlook

 

The Group's sales pipeline of larger prospects continues to grow as asset managers and fund administrators begin to see the benefits of StatPro's cloud-based technology for their risk and performance management operations.

 

The Board is positive about the prospects for H2 2017 with trading expected to be in line with expectations. The addition of Delta underpins this confidence.

 

Operational review

 

Total StatPro Revolution revenue grew 61%, including acquisitions. The underlying growth, excluding acquisitions, was 27%. StatPro Seven also continues to be resilient with StatPro Composites seeing growth of 9% in ARR as more and more asset managers become compliant with Global Investment Performance Standards ("GIPS®"). Professional services have been lower in part due to the greater ease with which clients are able to implement StatPro Revolution, thus requiring less consulting.

 

Since launching the core module, StatPro Revolution Performance in September 2016, two fund administrator clients have on-boarded 36 of their own clients between them. They are looking to expand this significantly in the second half of 2017.

 

StatPro Revolution Performance has transformed the operations of fund administrators, allowing the on-boarding of new clients more efficiently, with greater ease of controlling data and increased speed and scale in calculating results and delivering services to their clients. It is notable that both of these fund administrators have spoken at conferences on the benefits of StatPro Revolution in providing their clients a better service.

 

The performance measurement and risk analytics market is largely a replacement market and it can take time for prospects to make decisions. However, the step change that the Group's proven technology offers is giving StatPro a real advantage over incumbent legacy systems. Once a decision to switch has been made, it is normally for a five to ten-year period.

 

With the Group's new technology now maturing as a service, StatPro is expanding its North America sales team. The Group has hired a senior executive, William Entwistle, to lead the team. William has previously worked at IDC, SS&C, and IBM and joins the Group's operating board, the Group Executive Board. StatPro has also hired three new salespeople for North America and is likely to invest in further additions in H2 2017.

 

In Europe, the Group has consolidated its sales teams in London and Milan following the acquisition of Delta. StatPro currently has 12 salespeople across Europe and is looking to expand the London team during H2.

 

The Group has consolidated its Asian operation into Sydney, doubling its size, and closed its Hong Kong office. StatPro has also added further sales resource there to help support its Delta clients in the region.

 

Development of StatPro Revolution has been expanded to include additional resource to handle the integration of Delta, as well as continuing the existing road map for development. StatPro has made three releases so far this year, each delivering significant improvements in functionality. Two more are expected this year.

 

Acquisitions

 

Delta

StatPro is fully engaged in the process of integrating Delta into the Group with the focus on developing the unique Delta functions inside StatPro Revolution. The Group is engaging with Delta clients to explain the integration plans.

 

The Group is focussed on continuing to ensure that there is no disruption to Delta's service, as StatPro has guaranteed the existing platform for five years. The business is having extensive consultations with clients to ensure optimal migration.

 

It is also clear that there are numerous opportunities for new business with Delta clients.

 

Alpha (previously Investor Analytics)

StatPro launched the first version of Alpha integrated with StatPro Revolution in March 2017 and the second version was released in July 2017. The Group expects to complete the integration of Alpha seamlessly into the StatPro Revolution platform next year.

 

Alpha's physical servers have been moved from New Jersey to the Group's private cloud capability in Toronto. The combination of Alpha and StatPro Revolution has resulted in a number of additional sales and the pipeline is growing well.

 

Increased investment in Infovest

In February 2017, StatPro increased its investment in Infovest to 72.7% by acquiring additional shares from three of the founders of the company. The business has made strong progress since StatPro acquired 51% of the business in March 2016.

 

Infovest revenues have grown 28%, and profitability has increased by approximately 47%. Infovest has been able to leverage the Group's global network of clients to win new business in the US, Canada and the UK as well as its home market of South Africa.

 

Financial review

 

Revenue

Group revenue increased by 23% to £21.62 million (2016: £17.55 million). The revenue growth was driven by organic growth in StatPro Revolution combined with the positive impact of the Delta acquisition and currency benefits, offset by the expected reduction in revenue for StatPro Seven, as shown below.

 

 





£m

% change

Revenue bridge



H1 2016 at actual rates

17.55


Underlying growth



StatPro Revolution

0.96

+16%

StatPro Seven

(0.38)

(4%)

Data/professional fees

(0.23)

(7%)


0.35

+2%

Impact of acquisitions and currency



Acquisitions

1.86


Currency impact

1.86


H1 2017 at actual rates

21.62

+23%

95% of Group revenue was recurring revenue (2016: 93%).

 

Recurring revenue

The Group's SaaS business model of recurring revenue contracts provides excellent visibility of projected revenue. ARR at the end of June 2017 increased by 47% over the previous 12 months to £53.19 million (2016: £36.17 million). Organic growth of StatPro Revolution ARR was 9%.  Growth in StatPro Seven ARR was 3%; Data ARR fell by 2%. Excluding the impact of acquisitions and currency rates, overall organic growth in Group ARR was 3% (2016: 1%). 

 

Our revenue derives from contracts in a mix of currencies, with the primary ones being EUR, USD, GBP and CAD and therefore the business is impacted by movements in fx rates but the spread of currencies for revenues and costs provides an element of natural hedging in the reported results.

 

There has been a significant increase (67%) in average revenue per StatPro Revolution/cloud client to £75,500 (2016: £45,300), boosted by continued focus on larger contract values, and the Delta acquisition, where average revenue per client is approximately £127,500. The organic growth of average ARR for StatPro Revolution was 19%.

 

Approximately 85% of new recurring contracted revenue came from existing clients (2016: 83%). Data fees were £2.03 million (2016: £1.81 million) and professional services revenue was £1.03 million (2016: £1.16 million).

 

SaaS-based KPIs

One KPI used by SaaS businesses is the ratio of costs of acquiring each customer ("CAC") compared to the Lifetime Value of the customer contracts ("LTV"). The results for StatPro are presented below for June 2017 on a 12-month trailing basis.

 

All contracts (unaudited)








Year to 30 June

Year to 30 June





2017

2016



Average Cost of Acquiring Customer ("CAC") (£'000s)


120.0

85.9









Implied Customer Lifetime (years)


12.4

10.2









Average ARR per customer (£'000s)


98.8

79.3









Implied Customer Lifetime Value ("LTV") (£'000s)


1,221

810









LTV: CAC


10.2

9.4



 

The comparatives for June 2016 have been restated to be consistent with the methodology adopted in the Annual Report for 2016

 

A value of three or higher for the ratio of LTV:CAC is considered the industry benchmark for a successful SaaS business and for StatPro it is well above this figure. 

 

Operating expenses

Operating expenses (before amortisation of intangible assets and exceptional items) increased as planned by 22% (13% at constant currency) to £17.78 million (2016: £14.54 million). £1.96 million (13%) of the increase was related to operating costs within the recently acquired Delta business. Other increases in expenditure related to the investment in cloud technology, data costs, software and communications costs and cloud infrastructure. The average number of employees was 303 (2016: 255).

 

Adjusting items

One-off adjusting items amounting to a total of £2.71 million were incurred. These include: £2.51 million related to the transaction costs of the acquisition and associated restructuring charges in Delta as well as costs arising from streamlining StatPro's European operations. The non-cash fair value movement on the non-controlling interest put option of £0.20 million relates to Infovest.

 


Six months to

Six months to

Six months to

Six months to

 June 2017

 June 2017

 June 2017

 June 2016


£'000s

£'000s

£'000s

£'000s



Existing






operations

Acquisition

Total

Total

Fair value movement on non-controlling interest put option


202

-

202

-







Acquisition transaction, redundancy and other integration costs


499

2,008

2,507

1,241







Total adjusting items


701

2,008

2,709

1,241

 

Profitability

Adjusted EBITDA increased to £2.78 million (2016: £2.05 million). Gross profit margin was 58% (2016: 60%) as shown in note 5. The adjusted EBITDA margin was 12.9% (2016: 11.7%). Delta was close to breakeven on an adjusted EBITDA basis in the short period since acquisition and the core business had an EBITDA margin of approximately 14.6%.

 

Finance income and expense

Net finance expense was £0.50 million (2016: £0.36 million), as a result of increased net debt associated with the financing of the Delta acquisition.

 

Loss before tax

The adjusted operating profit increased year on year to £1.94 million (2016: £1.29 million). Adjusting items include amortisation of acquired intangible assets (£0.88 million), acquisition related and restructuring costs (£2.51 million), fair value movement on non-controlling interest put option (£0.20 million), and share based payments (£0.14 million). The loss before taxation was £2.29 million (2016: £0.96 million).

 

EBITDA Reconciliation







2017

2016




£'000s

£'000s

% change

Adjusted EBITDA


2,780

2,053

35%

Depreciation of property, plant and equipment


(743)

(659)


Amortisation on purchased assets


(95)

(105)


Adjusted operating profit


1,942

1,289

51%

Amortisation on acquired intangible assets


(881)

(546)


Fair value movement on non-controlling interest put option


(202)

-


Acquisition related, restructuring costs and negative goodwill


(2,507)

(1,241)


Share-based payments


(144)

(105)


Total adjusting items


(3,734)

(1,892)


Operating loss


(1,792)

(603)


Net finance expense


(496)

(357)


Loss before taxation


(2,288)

(960)


 

Taxation

The tax credit was £0.27 million (2016: £0.25 million). The overall effective tax credit rate on the loss is 12% (2016: 26%). The underlying tax rate has reduced mainly due to reducing UK tax rates and R&D tax benefits.

 

Earnings/losses per share

Adjusted earnings per share was 1.8p (2016: 1.1p). Actual basic and diluted losses per share was 3.3p (2016: 1.2p).  

 

Interim dividend

An interim dividend of 0.85 pence per ordinary share (2016: 0.85 pence) will be paid on 1 November 2017 to shareholders on the register at the close of business on 6 October 2017 (ex-div date will be 5 October 2017).

 

Balance sheet

The Group's net assets at the period end were £28.93 million (Dec 2016: £32.59 million). The primary movements in the six-month period were the increase in intangible assets of £10.33 million, mainly relating to the acquired intangibles from the Delta acquisition, and the increase in borrowings related to acquisition payments. There has also been an increase in deferred revenue, which is a non-cash liability to £18.58 million (Dec 2016: £17.60 million).

 

Cash flow and financing

StatPro continues to be cash generative with cash generated from operations of £7.48 million (2016: £2.29 million), benefitting from strong positive working capital movements. The free cash flow was an inflow of £3.52 million (2016: outflow of £2.44 million). The Group ended the period with net debt of £18.92 million (Dec 2016: £10.06 million). The increase in net debt arose primarily because of the financing of the Delta acquisition, and further payments on Infovest and Investor Aanalytics acquisitions, using the Group's debt facilities.

 

Financing facility

As part of the acquisition of Delta signed in April 2017, the multi-currency financing facilities with Wells Fargo were increased. The key features of the facilities, now amounting to £41.0 million, are:

 

·      Five-year commitment period to April 2022

·      £10 million committed revolving credit facility

·      Committed term loans totalling £19.0 million

·      Committed deferred drawdown loans totalling £4.5 million

·      £7.5 million uncommitted additional facility available

 

The primary financial covenants are linked to recurring revenue and EBITDA while allowing the Group to invest for growth. The financing costs are amortised over the five-year term. This facility strengthens the Group's long-term financial structure and therefore the Board believes that the Group is well positioned to manage the business risks.

 

Acquisitions

During H1 2017, StatPro completed one acquisition and increased its investment in an existing subsidiary, as follows:

 

Acquisition of Delta

On 15 May 2017, StatPro completed the First Closing of the acquisition, from UBS, of its risk and performance analytics service, UBS Delta. An initial payment of approximately £7.5 million has been made, out of a total cash consideration of approximately €13 million (£11.2 million), with the remainder being paid over three years.

 

Increase in majority control of Infovest

The Group increased its shareholding in Infovest Consulting (Pty) Ltd ("Infovest"), from 51.0% to 72.7% in February 2017. The consideration for the additional 21.7% shareholding was ZAR 19.1 million (£1.15 million) in cash.

 

Further details on these acquisitions are provided in note 9.

 

Research and development and capex

The research and development team is now focused solely on the Group's cloud-based solutions, the StatPro Revolution platform. R&D expenditure increased to £3.62 million (2016: £2.27 million), equating to 17% of Group revenue (2016: 13%). R&D has increased as a result of the work commenced on integrating the Delta product onto the Revolution platform and although R&D is higher than H1 2016, the level of R&D spend in relation to revenue is similar to the level in FY 2016. Capitalised development costs were £2.62 million (2016: £1.87 million) and amortisation on internal development was £1.94 million (2016: £1.71 million). Capital expenditure on property, plant and equipment was £1.46 million (2016: £1.02 million), of which £1.09 million were financed under finance lease arrangements.

 

Principal risks and uncertainties

The directors continue to evaluate the principal business risks and uncertainties affecting the Group and further discussion of the principal risks and uncertainties can be found on pages 24 to 27 of the StatPro 2016 Annual Report.

 

Group Income Statement

For the six months ended 30 June 2017

 

 

Notes

Unaudited

Unaudited

Unaudited

Unaudited

Audited



Six months to 30 June


Six months to 30 June


Six months to 30 June


Six months to 30 June


Year to 
31
December

2017

2017

2017

2016

2016












£'000s

£'000s

£'000s

£'000s

£'000s



Existing operations


Acquisition *


Total
















Revenue

3

19,754


1,861


21,615


17,546


37,545












Operating expenses before amortisation of intangible assets and other adjustments


(15,826)


(1,957)


(17,783)


(14,545)


(30,254)

Amortisation of acquired intangible assets


(570)


(311)


(881)


(546)


(1,060)

Amortisation of other intangible assets


(2,034)


-


(2,034)


(1,817)


(4,191)

Goodwill impairment


-


-


-


-


(9,724)

Fair value movement on non-controlling interest put option

4

(202)


-


(202)


-


(628)

Movements in provisions for contingent consideration


-


-


-


-


272

Acquisition related, restructuring costs and negative goodwill

4

(499)


(2,008)


(2,507)


(1,241)


(1,298)












Operating expenses


(19,131)


(4,276)


(23,407)


(18,149)


(46,883)












Operating profit/(loss)


623


(2,415)


(1,792)


(603)


(9,338)












Finance income






33


7


33

Finance expense






(529)


(364)


(819)

Net finance expense






(496)


(357)


(786)












Loss before taxation

5





(2,288)


(960)


(10,124)












Taxation






267


252


74












Loss for the period






(2,021)


(708)


(10,050)












Profit attributable to non controlling interests






98


71


94

Loss attributable to equity shareholders






(2,119)


(779)


(10,144)







(2,021)


(708)


(10,050)












Loss per share - basic

2





 (3.3)p


 (1.2)p


(15.4)p

                           - diluted

2





 (3.3)p


 (1.2)p


(15.4)p

 

 

* This relates to the results of the acquisition made during the financial period

 

 

 

Group Statement of Comprehensive Income

For the six months ended 30 June 2017

 

 

Unaudited

Audited

Six months to 30 June

Six months to 30 June

Year to        31 December

2017

2016


£'000s



£'000s

Loss for the period

(2,021)



(10,050)






Other comprehensive income to be reclassified to the income statement:





Net exchange differences

(333)



6,606

Total comprehensive (loss)/income for the period

(2,354)


4,156


(3,444)







Attributable to:





Non controlling interests

109



139

Equity shareholders

(2,463)



(3,583)

Total comprehensive (loss)/income for the period

(2,354)


4,156


(3,444)

 

 

Group Balance Sheet

At 30 June 2017

 

Notes

Unaudited

Unaudited

 Audited


At 30 June

At 30 June

At 31 December

2017

2016

2016



£'000s


£'000s


£'000s

Non-current assets







Goodwill

10

44,447


53,656


44,759

Other intangible assets

10

21,266


11,107


10,937

Property, plant and equipment


3,457


2,895


2,742

Other receivables


135


237


134

Deferred tax assets


2,541


890


516



71,846


68,785


59,088

Current assets







Trade and other receivables


8,161


9,211


12,051

Financial instruments - other


10


-


-

Current tax assets


1,518


1,042


2,674

Cash and cash equivalents


3,354


3,615


4,356



13,043


13,868


19,081

Liabilities







Current liabilities







Financial liabilities - borrowings


(4,212)


(511)


(8,459)

Financial instruments - non-controlling interest put option *


(1,615)


(1,929)


(2,557)

Financial instruments - other


(9)


(283)


(32)

Trade and other payables *


(6,296)


(5,385)


(7,573)

Current tax liabilities


(602)


(162)


(485)

Deferred income


(18,536)


(15,631)


(17,534)

Provisions *

11

(1,284)


(1,197)


(680)



(32,554)


(25,098)


(37,320)








Net current liabilities


(19,511)


(11,230)


(18,239)








Non-current liabilities







Financial liabilities - borrowings


(18,062)


(12,245)


(5,961)

Other creditors *

11

(3,443)


(2,375)


(819)

Deferred tax liabilities


(1,864)


(2,202)


(1,416)

Deferred income


(40)


(41)


(67)

Provisions *

11

-


-


-



(23,409)


(16,863)


(8,263)








Net assets


28,926


40,692


32,586








Shareholders' equity







Share capital

12

678


678


678

Share premium


23,537


23,537


23,537

Shares to be issued


63


63


63

Treasury shares

12

(2,328)


(2,328)


(2,328)

Other reserves


6,980


5,627


7,324

Retained earnings


(142)


12,796


3,018

Total shareholders' equity


28,788


40,373


32,292

Non controlling interests


138


319


294

Total equity


28,926


40,692


32,586

* For consistency with the year-end audited accounts for 2016, the comparatives for some components of provisions have been reclassified to non-controlling interest put option, and trade and other payables.

 
 
Group Statement of Cash Flows
For the six months ended 30 June 2017
 

 



Unaudited


Unaudited


Audited


Notes

Six months to 30 June


Six months to 30 June


Year to 31 December



2017


2016


2016










£'000s


£'000s


£'000s

Operating activities







Cash generated from operations

6

7,479


2,291


7,454

Finance income


33


7


30

Finance costs


(328)


(223)


(530)

Tax received


173


-


453

Tax paid


(753)


(1,421)


(1,747)

Net cash flow from operating activities


6,604


654


5,660








Investing activities







Acquisition of subsidiaries (net of cash acquired)

9

(10,269)


(4,806)


(4,786)

Investment in intangible assets


(2,716)


(2,080)


(4,940)

Purchase of property, plant and equipment


(365)


(1,016)


(1,518)

Proceeds from the disposal of property, plant and equipment


-


-


13

Net cash flow used in investing activities


(13,350)


(7,902)


(11,231)








Financing activities







Net proceeds from bank loan

7

7,281


10,797


11,685

Net (payments to)/proceeds from finance leases

7

(280)


1,040


(330)

Purchase of own shares


-


(2,079)


(2,079)

Dividends paid to non-controlling interests


(135)


-


-

Dividends paid to shareholders


(1,327)


(1,327)


(1,877)

Net cash flow from financing activities


5,539


8,431


7,399








Net (decrease)/increase in cash and cash equivalents


(1,207)


1,183


1,828

Cash and cash equivalents at start of period


4,356


2,203


2,203

Effect of exchange rate movements


205


229


325

Cash and cash equivalents at end of period


3,354


3,615


4,356

 

 

Group Statement of Changes in Shareholders' Equity
For the six months ended 30 June 2017

 

 

Unaudited

Share capital

Share premium

Shares to be issued

Treasury shares

Other reserves *

Retained earnings

Non-controlling interest

Total equity

  

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000

£'000s

At 1 January 2016

678

23,537

63

(249)

2,692

14,796

-

41,517










Profit for the period

-

-

-

-

-

(779)

71

(708)

Other comprehensive income

-

-

-

-

4,864

-

-

4,864

Total comprehensive income

-

-

-

-

4,864

(779)

71

4,156










Transactions with owners:









Put option relating to non-controlling interests

-

-

-

-

(1,929)

-

-

(1,929)

Non-controlling interests

-

-

-

-

-

-

248

248

Purchase of own shares

-

-

-

(2,079)

-

-

-

(2,079)

Share based payment transactions

-

-

-

-

-

105

-

105

Tax relating to share option scheme

-

-

-

-

-

1

-

1

Dividends

-

-

-

-

-

(1,327)

-

(1,327)

At 30 June 2016

678

23,537

63

(2,328)

5,627

12,796

319

40,692

 

 

 

Unaudited

Share capital

Share premium

Shares to be issued

Treasury shares

Other reserves *

Retained earnings

Non-controlling interest

Total equity

  

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000

£'000s

At 1 January 2017

678

23,537

63

(2,328)

7,324

3,018

294

32,586










Profit for the period

-

-

-

-

-

(2,119)

98

(2,021)

Other comprehensive income

-

-

-

-

(344)

-

11

(333)

Total comprehensive income

-

-

-

-

(344)

(2,119)

109

(2,354)










Transactions with owners:









Non-controlling interests

-

-

-

-

-

130

(130)

-

Share based payment transactions

-

-

-

-

-

144

-

144

Tax relating to share option scheme

-

-

-

-

-

12

-

12

Dividends

-

-

-

-

-

(1,327)

(135)

(1,462)

At 30 June 2017

678

23,537

63

(2,328)

6,980

(142)

138

28,926

 

* Other reserves includes a merger reserve of £2,369,000 (2016: £2,369,000), a translation reserve surplus of £6,540,000 (2016: £5,187,000) and a reserve relating to the put option held by non-controlling interests of a debit balance of £1,929,000 (2016: £1,929,000).  The merger reserve arose on acquisitions and represents the difference between the fair value and the nominal value of the shares issued.  The translation reserve incorporates the gains and losses on revaluation of the net assets and liabilities of subsidiary undertakings and other currency gains and losses that are presented in equity.

 

 

Notes to the interim financial information

For the six months ended 30 June 2017

 

 

1.   Principal Accounting policies

This interim report was approved by the Board of directors on 1 August 2017. The financial information set out in this interim report has been prepared under IFRS as adopted by the European Union and on the basis of the accounting policies set out in the statutory accounts of StatPro Group plc for the year ended 31 December 2016, amended as explained below.

 

New and amended accounting standards and interpretations

 

There were no new or amended IFRS and IFRIC interpretations effective as of 1 January 2017 which impact this interim report.

 

Interpretations and revised standards that are not yet effective and have not been early adopted by the Group


The following interpretations to existing standards have been published that are mandatory for the Group's future accounting but which the Group has not adopted early.  Management has not yet fully assessed the impact of these new standards.

 

·      IFRS 9 Financial Instruments - Classification and Measurement - 1 January 2018

·      IFRS 15 Revenue from Contracts with Customers - 1 January 2018

·      IFRS 16 Leases - 1 January 2019

 

This report is not prepared in accordance with IAS 34, which is not mandatory. This interim report has not been audited but has been reviewed in accordance with ISRE 2410 by the Company's auditors, Ernst & Young LLP. The financial information does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. Statutory accounts for StatPro Group plc for the year ended 31 December 2016 reported under IFRS have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.  Copies of this report will be posted or provided electronically to shareholders. Further copies are available free of charge on request from the Company Secretary at the Company's registered office, Mansel Court, Mansel Road, London SW19 4AA.

 

Basis of preparation - going concern

After making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.  For these reasons, the Board continues to adopt the going concern basis in preparing the interim report.

 

2.    Earnings/losses per share

Basic (loss)/earnings per share has been calculated based on the loss after taxation of £2.12 million (2016: £0.78 million) and the weighted average number of shares of 64.72 million (2016: 65.84 million).  The basic and diluted losses per share were 3.3p (2016: 1.2p).



Earnings


Weighted average number of shares


Earnings per share


Earnings


Weighted average number of shares


Earnings per share



Six months to 30 June


Six months to 30 June


Six months to 30 June


Six months to 30 June


Six months to 30 June


Six months to 30 June



2017


2017


2017


2016


2016


2016



Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Unaudited



£'000s


'000s


pence


£'000s


'000s


pence

Loss per share - basic and diluted


(2,119)


64,715


(3.3)


(779)


65,836


(1.2)

 

Adjusted earnings per share are shown in the table below. The diluted adjusted earnings per share are based on potentially dilutive shares outstanding of 1.80 million (2016: 1.06 million).  The reported diluted loss per share for the year to 31 December 2016 has been adjusted to 15.4p from the 15.1p previously reported.


Earnings


Weighted average number of shares


Earnings per share


Earnings


Weighted average number of shares


Earnings per share


Six months to 30 June


Six months to 30 June


Six months to 30 June


Six months to 30 June


Six months to 30 June


Six months to 30 June


2017


2017


2017


2016


2016


2016


Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


£'000s


'000s


pence


£'000s


'000s


pence

Loss per share - basic

(2,119)


64,715


(3.3)


(779)


65,836


(1.2)

Add back: amortisation of acquired intangibles

881


-


1.4


546


-


0.8

Add back: Non-controlling interest put option

202


-


0.3


-


-


-

Add back: Acquisition related, restructuring costs and negative goodwill

2,507


-


3.9


1,241


-


1.9

Effect of tax on adjusting items

(451)


-


(0.7)


(391)


-


(0.6)

Add back: share based payments

144


-


0.2


105


-


0.2

Adjusted earnings per share

1,164


64,715


1.8


722


65,836


1.1

Potentially dilutive shares

-


1,799


(0.0)


-


1,059


(0.0)

Adjusted earnings per share - diluted

1,164


66,514


1.8


722


66,895


1.1

 

 

3.   Revenue analysis

 

Revenue by type of service was as follows:

 


2017

2017

2017

2016



Existing

Acquisition

Total


Change


£ million

£ million

£ million

£ million

%

Revenue






StatPro Revolution/cloud

 6.94

 1.86

 8.80

 5.45

61%

StatPro Seven

 9.76

  -   

 9.76

 9.13

7%

Data fees

 2.03

  -   

 2.03

 1.81

12%

Total recurring revenue

 18.73

 1.86

 20.59

 16.39

26%

Professional services

 1.03

  -   

 1.03

 1.16

(11%)

Total revenue

 19.76

 1.86

 21.62

 17.55

23%

Percentage of total revenue that is recurring

95%

100%

95%

93%


 

 The Acquisition relates to Delta

 

 

A key performance indicator for the Group is the Annualised Recurring Revenue ("ARR") from client contracts. The movement in Annualised Recurring Revenue ("ARR") in the 12-month period to June 2017 was as follows:

 

Annualised Recurring Revenue


June 2017


June 2016



£ million


£ million

At 30 June 2016


36.17


28.62

Net impact of exchange rates


1.51


3.30

At 30 June2016 (at 30 June 2017 rates)


37.68


31.92






ARR added from acquisitions


14.53


3.97






New contracted revenue


5.47


5.27

Cancellations/reductions


(4.49)


(4.99)

Net increase


0.98


0.28






At 30 June 2017


53.19


36.17






Percentage increase in revenue





Total ARR increase


47%


26%

Total ARR increase at constant currency


41%


13%

Total ARR - organic increase


3%


1%

 

The Annualised Recurring Revenue profile of StatPro Revolution clients (including Delta cloud solution) was as follows:

 

StatPro Revolution 

Annualised revenue


Number of clients


Average revenue per client


Annualised revenue*


Number of clients


Average revenue per client *

Annualised revenue bands

June 2017


June 2017


June 2017


June 2016


June 2016


June 2016


£'000s


Number


£'000s


£'000s


Number


£'000s

<£10k

334


95


3.5


382


124


3.1

£10k - £50k

3,265


133


24.5


2,196


102


21.5

£50k-£100k

4,570


60


76.2


3,099


40


77.5

£100k-£200k

9,877


72


137.2


5,403


41


131.8

>£200k

11,311


29


390.0


3,179


8


397.4

Total

29,357


389


75.5


14,259


315


45.3

* at constant currency

 

 

4.         Adjusting items

One-off adjusting items amounting to a total of £2.71 million were incurred in H1 2017. These include: £2.51 million related to the acquisition of Delta and associated restructuring charges in the core business. The fair value movement on the non-controlling interest put option of £0.20 million relates to Infovest.

 



Six months to

Six months to

Six months to

Six months to



 June 2017

 June 2017

 June 2017

 June 2016



£'000s

£'000s

£'000s

£'000s



Existing






operations

Acquisition

Total

Total

Fair value movement on non-controlling interest put option


202

-

202

-







Acquisition transaction, redundancy and other integration costs


499

2,008

2,507

1,241




Total adjusting items


701

2,008

2,709

1,241

 

5.         Adjusted profit before taxation, adjusted operating profit, adjusted EBITDA and gross margin analysis

a)         Adjusted profit before taxation

 

 


Unaudited


Unaudited


Audited


Six months to 30 June


Six months to 30 June


Year to 31 December


2017


2016


2016








£'000s


£'000s


£'000s

(Loss)/Profit before taxation

(2,288)


(960)


(10,124)

Add back: Amortisation on acquired intangible assets

881


546


1,060

Add back: goodwill impairment

-


-


9,724

Add back: fair value movement on non-controlling interest put option

202


-


628

Add back: movements in provisions for contingent consideration

-


-


(272)

Add back: acquisition related, restructuring costs and negative goodwill

2,507


1,241


1,298

Add back: Share based payments

144


105


361

Adjusted profit before tax

1,446


932


2,675

 

b)         Adjusted operating profit

 

 

`

Unaudited


Unaudited


Audited


Six months to 30 June


Six months to 30 June


Year to 31 December


2017


2016


2016








£'000s


£'000s


£'000s

Operating (loss)/profit

(1,792)


(603)


(9,338)

Add back: Amortisation on acquired intangible assets

881


546


1,060

Add back: goodwill impairment

-


-


9,724

Add back: fair value movement on non-controlling interest put option

202


-


628

Add back: movements in provisions for contingent consideration

-


-


(272)

Add back: acquisition related, restructuring costs and negative goodwill

2,507


1,241


1,298

Add back: Share based payments

144


105


361

Adjusted operating profit

1,942


1,289


3,461

 

c)         Adjusted EBITDA

 

 


Unaudited


Unaudited


Audited


Six months to 30 June


Six months to 30 June


Year to           31 December


2017


2016


2016








£'000s


£'000s


£'000s

Operating (loss)/profit

(1,792)


(603)


(9,338)

Add back: Depreciation of property, plant and equipment

743


659


1,327

Add back: Amortisation on purchased intangible assets

95


105


316

Add back: Amortisation on acquired intangible assets

881


546


1,060

Add back: goodwill impairment

-


-


9,724

Add back: fair value movement on non-controlling interest put option

202


-


628

Add back: movements in provisions for contingent consideration

-


-


(272)

Add back: acquisition related, restructuring costs and negative goodwill

2,507


1,241


1,298

Add back: Share based payments

144


105


361

Adjusted EBITDA

2,780


2,053


5,104







Adjusted EBITDA margin

12.9%


11.7%


13.6%

 

d)         Gross profit margin analysis

 

Gross profit margin analysis helps us assess the profitability of incremental revenue as the business evolves into a pure cloud business and the costs drivers begin to change.  As there are a number of methodologies for allocating costs, we have described how we have allocated the cost elements.  The Board's view is that, as the business grows, the inherent scalability of cloud technology will lead to greater profitability in the future.

 

 



Unaudited


Unaudited


Unaudited



Six months to 30 June


Six months to 30 June


Year to 31 December



2017


2016


2016










%


%


%

Revenue


100.0%


100.0%


100.0%

Cost of services


(42.1%)


(40.0%)


(38.9%)

Gross profit margin


57.9%


60.0%


61.1%








R&D costs


(5.4%)


(6.3%)


(5.4%)

Sales & Marketing costs


(11.0%)


(8.9%)


(10.3%)

General & Administration costs


(29.3%)


(33.6%)


(32.8%)



(45.7%)


(48.8%)


(48.5%)

Share-based payments


0.7%


0.5%


1.0%

Adjusted EBITDA


12.9%


11.7%


13.6%

 

Definition of cost category for gross margin analysis:

Cost of services includes Clients Services employee salaries, Data employee salaries, Development employee salaries related to support, contractors' costs, data costs, costs of software and hardware maintenance.

 

R&D includes the element of Development employee salaries that relates to new research and development.

 

Sales & marketing includes Sales and Marketing employee salaries, external marketing costs and sales commissions.

General & administration includes the Finance, HR and IT employee salaries, communications costs, occupancy costs, professional fees, travel and expenses, and other costs.

 








Six months to 30 June


Six months to 30 June


Year to 31 December

General & Administration costs

2017


2016


2016


%


%


%

Finance, HR & Administration

(2.0%)


(3.2%)


(3.2%)

IT & Internal projects

(5.0%)


(4.8%)


(4.7%)

Executive management

(2.4%)


(2.7%)


(2.7%)

Employee-related costs including travel

(6.6%)


(7.3%)


(7.4%)


(16.0%)


(18.0%)


(18.0%)







Property & communications

(9.1%)


(10.1%)


(9.8%)

Professional fees, insurance and other

(4.2%)


(5.5%)


(5.0%)


(13.3%)


(15.6%)


(14.8%)

Total General & Administration costs

(29.3%)


(33.6%)


(32.8%)

 

Free cash flow


Unaudited


Unaudited


Audited


Six months to 30 June


Six months to 30 June


Year to 31 December


2017


2016


2016


£'000s


£'000s


£'000s

Cash generated from operations before exceptional payments

8,762


3,166


8,905

Net interest paid

(295)


(216)


(500)

Net tax paid

(580)


(1,421)


(1,294)

Purchase of property, plant and equipment

(365)


(1,016)


(1,518)

Investment in intangible assets

(2,716)


(2,080)


(4,940)

Free cash flow (before adjusting items)

4,806


(1,567)


653

Acquisition-related and restructuring costs

(1,283)


(875)


(1,451)

Free cash flow

3,523


(2,442)


(798)

 

 

Property, plant and equipment amounting to £1.09 million acquired under finance leases is excluded from the cash flow.

 

 

6.         Reconciliation of profit before tax to net cash inflow from operating activities

 

 


Unaudited


Unaudited


Audited


Six months to 30 June


Six months to 30 June


Year to 31 December


2017


2016


2016








£'000s


£'000s


£'000s







Loss before taxation

(2,288)


(960)


(10,124)

Net finance expense

496


357


786

Operating loss

(1,792)


(603)


(9,338)

Goodwill impairment

-


-


9,724

Fair value movement on non-controlling interest put option

202


-


628

Movements in provisions for contingent consideration

-


-


(272)

Acquisition-related, restructuring costs and negative goodwill

2,507


1,241


1,298

Depreciation of property, plant and equipment

743


659


1,327

Loss on disposal of property, plant and equipment

-


-


29

Amortisation of intangible assets

2,915


2,363


5,251

Decrease/(increase) in receivables

3,501


826


(1,937)

(Decrease)/increase in payables and provisions

(433)


(1,560)


380

Increase in deferred income

975


135


1,453

Share based payments

144


105


362

Net cash inflow from operating activities before exceptional payments

8,762


3,166


8,905

Acquisition-related and restructuring costs

(1,283)


(875)


(1,451)

Net cash inflow from operating activities

7,479


2,291


7,454

 

 

7.         Reconciliation of net cash flow to movement in net (debt)/cash

 

 


At 1 January


Non-cash

Exchange

At 30 June


2017

Cash flow

changes

differences

2017


£'000s

£'000s

£'000s

£'000s

£'000s

Cash and cash equivalents (per balance sheet)

4,356

(1,207)

-

205

3,354

Overdrafts

-

-

-

-

-

Cash and cash equivalents (per statement of cash flows)

4,356

(1,207)

-

205

3,354

Finance leases

(1,228)

280

(1,073)

3

(2,018)

Bank, other loans and derivatives

(13,192)

(7,281)

(94)

311

(20,256)

Net (debt)/cash

(10,064)

(8,208)

(1,167)

519

(18,920)

 

 


At 1 January


Non-cash

Exchange

At 30 June


2016

Cash flow

changes

differences

2016


£'000s

£'000s

£'000s

£'000s

£'000s

Cash and cash equivalents (per balance sheet)

2,203

1,183

-

229

3,615

Overdrafts






Cash and cash equivalents (per statement of cash flows)

2,203

1,183

-

229

3,615

Finance leases

(269)

(1,040)

-

-

(1,309)

Bank, other loans and derivatives

(650)

(10,797)

-

-

(11,447)

Net cash

1,284

(10,654)

-

229

(9,141)

 

8.         Dividend

An interim dividend for 2017 of 0.85 pence per ordinary share (2016: 0.85 pence) will be paid on 1 November 2017 to shareholders on the register on 6 October 2017.  A final dividend for 2016 of 2.05 pence per ordinary share was paid on 26 May 2017. 

 

9.         Acquisitions

 

Acquisition of UBS Delta

 

On 15 May 2017, StatPro completed the First Closing of the acquisition from UBS of its risk and performance analytics service, UBS Delta. An initial payment of approximately £7.5 million has been made, out of total cash consideration of approximately €13 million (£11.2 million), with a fair value of £10.55 million. The remaining payments will be paid as follows:

·      In May 2019 - approximately £1.4 million

·      In May 2020 - approximately £2.3 million

 

UBS Delta enables StatPro to extend its risk and performance analytics service from the middle office to the front office of asset managers.

 

The acquisition is phased over three to five years as StatPro incorporates UBS Delta's cloud-based functionality into its flagship product, StatPro Revolution.

 

The tables below provides the allocation of the purchase price to the fair value of intangible and tangible assets acquired as required under IFRS 3 and whilst these have been reviewed by the auditors, they are subject to audit at the year end. The provisional fair values of the assets and liabilities are presented below. The goodwill is not deductible for tax purposes.

 

The business was operated as part of a larger business unit and it is not practical to disclose pre-acquisition results.

 

 

 

Fair value of assets acquired and liabilities assumed


Provisional



fair value



£'000

Trade debtors


2,240

Intangible asset - Brand and client contract


2,359

Intangible asset - Technology


8,436



13,035




Deferred income


(1,867)

Other creditors and provisions


(373)

Deferred tax liability


(429)



(2,669)

Total identifiable net assets at fair value


10,366

Goodwill arising on acquisition


184

Fair value of purchase consideration


10,550

 

Increase in investment in Infovest

The Group increased its shareholding in Infovest Consulting (Pty) Ltd ("Infovest"), a South African-headquartered software provider, specialising in data warehouse, ETL and reporting software for the asset management industry, from 51.0% to 72.7% in February 2017. The consideration for the additional 21.7% shareholding was ZAR 19.1 million (£1.15 million) in cash. The transaction resulted in the derecognition of £1.15 million of the non-controlling interest put option and a £130,000 equity transfer from non-controlling interest to the retained earnings reserve.

 

The valuation of this buy-out is based on a formula linked to recurring revenue but with a minimum profit level with the multiple being just under eight times adjusted EBITDA.

 

Total cash payments on acquisitions in H1 2017 were as follows:

 


£ million

Delta initial payment

7.53

Investor Analytics deferred payment

1.59

Infovest increase

1.15

Total

10.27

 

 

10.        Goodwill and other intangible assets

Goodwill increased by £0.18 million as a result of the acquisition of Delta offset by a reduction due to currency movements.

 

Other intangible assets increased by £10.33 million, mainly due to the Delta acquisition and comprise internally generated development costs capitalised, acquired intangible assets (technology, brands and client contracts) and purchased intangible assets. 

 

11.        Other creditors and provisions

Other creditors greater than one year increased to £3.44 million, mainly due to the deferred consideration due on Delta.

 

Provisions of £1.28 million at 30 June 2017 (2016: £1.20 million) relates to residual deferred contingent consideration and provisions for redundancies and onerous contracts.  £0.62 million utilised in the period relates to the purchase of shares in SiSoft Sarl. On 25 July 2017, former shareholders of SiSoft Sarl lodged an appeal against the French Commercial Court's decision on the valuation of the shares purchased by StatPro. Management believe there is no merit in the appeal as the valuation was backed by an expert's report and no further amount has been provided.

 

 

Provisions - Group


2017


2017


2017


2016


Contingent consideration


Redundancies and onerous contracts


Total


Total



£'000s


£'000s


£'000s


£'000s

At 1 January


657


23


680


642

Utilised in the period


(616)


(1,283)


(1,899)


(556)

Arising in the period


-


2,507


2,507


1,029

Exchange differences


-


(4)


(4)


82

At 30 June


41


1,243


1,284


1,197

Some items that were included in provisions in June 2016 have been reclassified (e.g. non-controlling interest put option).

 

12.          Share capital and treasury shares

No shares were issued during the period (2016: nil). At 30 June 2017, there were 67,813,650 shares (2016: 67,813,650 shares) in issue including 3,098,713 (2016: 3,098,713) held in treasury (64,714,937 excluding treasury shares). The treasury shares do not accrue dividends and are excluded from the earnings per share calculation.

 

 

Independent review report to StatPro Group plc

 

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017, which comprises the Group Income Statement, Group Statement of Comprehensive Income, Group Balance Sheet, Group Statement of Cash Flows, Group Statement of Changes in Shareholders' Equity and the related notes 1 to 12. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Report in accordance with the AIM Rules issued by the London Stock Exchange which require that it is presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.

 

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRS's as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with the accounting policies outlined in Note 1, which comply with IFRS's as adopted by the European Union and in accordance with the AIM Rules issued by the London Stock Exchange.

 

 

Ernst & Young LLP

London

1 August 2017

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Interim results - RNS