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Aptitude Software   -  APTD   

Interim Results

Released 07:00 24-Jul-2019

RNS Number : 4889G
Aptitude Software Group PLC
24 July 2019
 

24 July 2019

APTITUDE SOFTWARE GROUP plc ('Aptitude Software' or 'Group')

INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2019

 

Aptitude Software Group plc (LSE: APTD, formerly Microgen plc), a specialist provider of powerful financial management software to large global businesses, reports its unaudited results for the six months ended 30 June 2019.

Key Highlights:

·     Strategic milestone achieved with the completion of the disposal of Microgen Financial Systems on 28 June 2019 for aggregate cash consideration of £51.4 million

·     The Group is now totally focused on Aptitude Software's applications which provide data and financial insight to ensure its global client base can maximise performance, certainty and control whilst minimising risk

·     Strong market fundamentals as technological advancement facilitates an increasingly automated approach to finance operations, augmented by the accelerators of regulatory requirements

·     Excellent new business performance in the first half of the year with the Group's Annual Recurring Revenue ('ARR')1 at 30 June 2019 increasing to £27.5 million (30 June 2018: £21.3 million and 31 December 2018: £24.0 million), growth of 29% in the previous twelve months

o Strong sales of the strategic Aptitude Accounting Hub, the application which provides our clients with the foundation for digital finance transformation

o Multiple sales of the Aptitude Insurance Calculation Engine, the latest of Aptitude Software's growing suite of regulatory-focused applications

o Continuing progress with the Aptitude Lease Accounting Engine and Aptitude Revenue Management, applications provided as Software-as-a-Service

·     Continuing development of Aptitude Software's global partner network, influencing most new business successes and providing certified implementation capability

·     Investment increased in the Aptitude Innovation Centre in Poland, a key differentiating asset of the Group, to driver further functionality and innovation

·     Aptitude Software has made excellent progress in the first half of 2019, both corporately and operationally, and is well placed for continued success in the second half of 2019 and future years with its growing installed base, expanded portfolio of product and service offerings, extended worldwide presence and well-established global partner network

Financial Highlights:

·     Overall revenue growth of 13% to £28.8 million (H1 2018: £25.4 million)

·     In line with Aptitude Software's business focus, software and subscription revenue has increased 19% to £14.1 million (H1 2018: £11.8 million). Software and subscription revenues now comprise 49% of total revenue (H1 2018: 46%)

·     Implementation and solution management services revenue growth of 8% to £14.7 million (H1 2018: £13.6 million), above expectations given the profile and timing of new business projects won in the above period 

·     Adjusted Operating Profit2 increased by 31% to £5.1 million (H1 2018: £3.9 million)

·     Adjusted Operating Margin increased to 18% (H1 2018: 15%) benefitting from both scale and an increasing proportion of software and subscription revenues

·     Group operating profit on a statutory basis increased 40% to £4.6 million (H1 2018: £3.3 million)

·     Profit from discontinued operations of £22.4 million (H1 2018: £2.3 million) including a gain of £20.3 million on the disposal of Microgen Financial Systems

·     Adjusted Basic Earnings per Share from continuing operations increased to 6.0 pence (H1 2018: 4.7 pence). Basic Earnings per Share from continuing operations increased to 5.5 pence (H1 2018: 4.0 pence)

·     Maintenance of dividend cover following the disposal of Microgen Financial Systems with interim dividend reduced to 1.8 pence per share (2018: 2.2 pence per share)

·     Strong balance sheet with cash of £69.9 million (H1 2018: £11.6 million) benefitting from the disposal of Microgen Financial Systems

·     Proposed £45 million return of cash to shareholders via a 'B share' scheme, scheduled for completion in August 2019

Commenting on the Interim Results, Ivan Martin, Chairman, said: -

'Aptitude Software has made excellent progress in the first half of 2019, both corporately and operationally.

'The completion of the disposal of Microgen Financial Systems is a significant milestone in the development of the Group. Aptitude Software is now solely focused on the specialised provision of powerful financial management software to large global businesses.

'The Group performed very well in the first half of the year with strong new business wins and an increasing base of recurring revenue contributing to the Group's strongest first half performance in its history. With a growing portfolio of product and service offerings, increasing worldwide presence and well-established partner network the business enters the second half of 2019 and future years with confidence.'

 

Contacts

 

Ivan Martin, Chairman                       

020-7496-8196

Philip Wood, Deputy Chief Executive Officer and Chief Financial Officer

 

Caroline Forde/ Hilary Buchanan/ Sam Modlin, Alma PR                

020-3405-0205

 

1 Annual Recurring Revenue ('ARR') is the value of Aptitude Software's software and subscription recurring revenue at a specific point in time, normalised to a one-year period. ARR includes recurring revenues contracted but yet to commence and excludes recurring revenues which are currently being received but are known to be terminating in the future.

2 Throughout this report Adjusted Operating Profit, Adjusted Operating Margin and Adjusted Basic Earnings per Share exclude non-underlying operating items, unless stated to the contrary. Details of non-underlying operating items are provided in Note 6

Certain non-IFRS financial measures (e.g. Adjusted Operating Profit) are included which assist management in comparing performance on a consistent basis.

Revenue and Operating Profit from the disposed Microgen Financial Systems business are reported within profit from discontinued operations in both H1 2019 and for comparative periods

 

Overview

Aptitude Software has made excellent progress in the first half of the year delivering a very strong new business performance whilst completing the Group's re-organisation into a business which is now totally focused on the specialised provision of powerful financial management software to large global businesses.

Aptitude Software's new business performance in the first half of 2019 was the strongest in its history with multiple sales of the Aptitude Insurance Calculation Engine ('AICE') and the Aptitude Accounting Hub ('AAH') being the key highlights. These successes have led to Aptitude Software's Annual Recurring Revenue ('ARR') increasing to £27.5 million at 30 June 2019 (30 June 2018: £21.3 million and 31 December 2018: £24.0 million), growth of 29% in the previous twelve months. 

Overall revenue for the six months ended 30 June 2019 has increased by 13% to £28.8 million (H1 2018: £25.4 million). Adjusted Operating Profit for the period increased by 31% to £5.1 million (H1 2018: £3.9 million) with operating profit on a statutory basis of £4.6 million (H1 2018: £3.3 million).

Further successes with AICE, Aptitude Software's application enabling insurers to comply with the complex accounting requirements of IFRS 17, have been achieved globally, highlighted by new business contracts with one of the largest insurers in the United Kingdom as well as with one of the leading global insurers.

In addition to Aptitude Software's credentials in helping organisations comply with complex regulations, there is a growing opportunity with AAH on a standalone basis as businesses seek to undertake a transformation of their finance function. With a number of substantial sales of AAH completed in North America in the first half of the year, the opportunity for AAH remains significant.

The completion of the disposal of Microgen Financial Systems on 28 June 2019 for £51.4 million is a major milestone in Aptitude Software's long-term strategy and represents the start of a new era which sees the Aptitude Software business become the total focus of the Group.

About Aptitude Software

Aptitude Software's innovative solutions enable large global businesses to transform the core of their finance function, complemented by regulatory-focused applications. All our products take data from complex systems, typically with unique and siloed data sources across multiple business entities, to create a unified view of finance. This allows our clients to increase their level of control and deliver financial insights to drive the performance of their business whilst achieving regulatory compliance for complex accounting standards.

Our clients include the world's largest companies, typically organisations with complex financial data and technology landscapes. Whilst our products are relevant for all sectors the Group has established a strong presence in banking, insurance and technology, media and telecom ('TMT') complemented by several clients in a series of other industries.

The business generates revenue from its software through a combination of licence fees (primarily annual recurring licences), software maintenance/support, software subscriptions for its cloud-based offerings and implementation and other support services including solution management services. Development continues to be performed at the Aptitude Innovation Centre in Poland with sales, support and implementation services provided from Aptitude Software's London headquarters and the North American and Singaporean regional businesses.

 

 

Key Product Overview

Aptitude Accounting Hub

In the first half of 2019 the Aptitude Accounting Hub ('AAH') has been licenced by a number of major insurers, not impacted by IFRS 17, as they seek to transform their finance organisations. With these successes AAH was the largest contributor to the growth in the Group's ARR in the first half of the year.

The opportunity for AAH is significant. AAH allows finance functions to take a leading role in driving the commercial performance of their business and provides the foundation for digital finance transformation. The application centralises and automates finance, accounting and reporting processes and delivers a detailed financial data foundation leading to operational intelligence to enhance business insights and decision making. AAH can be used on a standalone basis or in conjunction with other applications. With clients using multiple applications, AAH can either be licenced simultaneously with Aptitude Software's regulatory offerings as well as being either the first or follow-on sale to a client.

Aptitude Insurance Calculation Engine

The Aptitude Insurance Calculation Engine ('AICE') was a focus in the first half of 2019 in advance of the effective date of IFRS 17, an accounting standard which is effective for accounting periods commencing on 1 January 2022 for most regions. Global highlights of the sales of this application have been new business contracts with one of the largest insurers in the United Kingdom as well as with one of the world's leading insurers. In total, the agreements entered in the first half of 2019 contributed significantly to the growth in ARR with further opportunities expected to be concluded in the remainder of the year.

AICE allows an insurer to perform the calculations required to be compliant with IFRS 17. In conjunction with AAH, AICE allows an insurer to make strategic, transformational investment and delivers data, insights and decision support providing long-term business benefits that extend well beyond immediate regulatory compliance.

Aptitude Revenue Management

The Group's two revenue management applications, collectively Aptitude Revenue Management ('ARM'), have continued to make good progress. The key highlight in the first half of 2019 was the largest Software-as-a-Service ('SaaS') subscription to date for ARM. ARM enables finance teams to automate and simplify contract order to recognition, reporting and forecasting processes, going beyond IFRS 15 / ASC 606 compliance to allow total control over revenue management from all contract types ranging from subscription-based revenue models to complex multi-part contracts. This allows businesses to centrally understand and control the financial impact of all their commercial propositions, as well as providing new and valuable insights to support future business decision making.

Aptitude Lease Accounting Engine

Demand for the Aptitude Lease Accounting Engine continues as organisations seek to more efficiently and accurately comply with IFRS 16, an accounting standard which is effective for accounting periods commencing on 1 January 2019. An application provided as SaaS to its users, new subscriptions have been sold to clients in both Europe and North America with further opportunities identified for the second half of 2019 across all regions.

 

 

 

Software and Subscription Revenues

Aptitude Software's Annual Recurring Revenue ('ARR') at 30 June 2019 totals £27.5 million, an increase of 29% in the previous 12 months (30 June 2018: £21.3 million, 31 December 2018: £24.0 million).

ARR is the value of Aptitude Software's software and subscription recurring revenue at a specific point in time, normalised to a one-year period. ARR includes recurring revenues contracted but yet to commence and excludes recurring revenues which are currently being received but are known to be terminating in the future.

The growth in ARR is the key metric for the Group. Included within ARR are Aptitude Software's annual licence fees or maintenance for its on-premise clients and subscription fees for the Group's SaaS clients.

Software and subscription revenues recognised in the first half of 2019 increased by 19% to £14.1 million (H1 2018: £11.8 million). Software and subscription revenues now represent 49% of overall revenue (H1 2018: 46%). It is a key part of the Group's strategy to increase this percentage whilst maximising growth rate of Aptitude Software's ARR, a strategy which in due course will lead to growth in operating margin percentage given the higher margins achievable from software and subscriptions revenues.

Implementation and Solution Management Services

The Group's overall services revenue in H1 2019 increased 8% to £14.7 million (H1 2018: £13.6 million), above expectations given the profile and timing of new business projects won in the above period.

The Group's applications are powerful and, together with its global partner network of certified specialists, Aptitude Software is dedicated to making sure that its software is implemented efficiently, with minimal risk, short time-to-benefit and competitive total cost of ownership. As a result, implementation services are provided to new clients, the scale depending on the nature of the application, the size of the opportunity and the division of responsibility between Aptitude Software and its strategic partner.

Implementation services will now be regionalised into the International (Asia and Europe) and North American businesses. The regionalisation of professional services, a natural evolution for the Group as scale is reached, is expected to strengthen the focus on the long-term development of clients.

Whilst the majority of revenue is associated with the implementation of Aptitude Software's applications, there is a growing percentage of revenues derived from solution management services. This service is expected to further enhance the operation and longevity of applications within major clients and extend the responsibilities of Aptitude Software beyond traditional software maintenance services to include services typically performed by the clients' own IT teams, for example, monitoring of system performance, user administration and release management. Following the regionalisation of implementation services, there is now dedicated leadership of solution management services with the expectation that this will accelerate the adoption of this service amongst Aptitude Software's growing client base. The long term and recurring nature of solution management services is expected to provide greater certainty and visibility to the Group's services revenues.

People and Organisation

Aptitude Software's continued progress has been achieved through the exceptional quality of its people. The team is very talented, committed, work incredibly hard and is achieving great success. Retention remains absolutely key to the business and investment continues in career management and training as we continue to grow our brightest employees. The Board continues to be grateful to the Aptitude Software team for its outstanding contribution to the business.

As previously announced Aptitude Software's Chief Executive Officer, Tom Crawford, will not be seeking re-election at the 2020 Annual General Meeting as his wife continues to recover from a serious health issue. Tom will continue to lead the business for a number of months and is expected to continue to work with the Group on a part-time basis following the 2020 Annual General Meeting. Jeremy Suddards will be joining the Board on 1 September 2019 and will be transitioning to the role of Chief Executive Officer in the coming months. Jeremy joined the Group in January 2018 as the Chief Client Officer for our business in Europe and Asia having previously held senior roles within Hewlett Packard. The experiences acquired in his previous roles and from his time with Aptitude Software support the Board's view that Jeremy has the required talent and skills to lead the business through its next phase of growth.

Aptitude Innovation Centre

The long-established Aptitude Innovation Centre in Poland is a differentiating asset of the business. Modern development methodologies are followed with multi-discipline teams focused on specific applications. Benefitting from this approach, together with the culture of proactive problem solving and collaboration, the teams rapidly and frequently release new functionality, a key requirement given the continuing and evolving requirements of Aptitude Software's client base. Total expenditure on product management, research and development and support in the first half of the year increased to £6.2 million (H1 2018: £5.3 million).

Global Partner Network

Aptitude Software benefits from a high-quality global partner network which influences most sales and provides certified implementation capability. In addition to co-operation on a series of successful new business opportunities in the first half of the year, partners have helped Aptitude Software to open new markets (including the Australian insurance market) whilst assisting Aptitude Software to develop new opportunities for AAH in the US insurance market with a solution to address the new regulation, Long Duration Targeted Improvement (LDTI).

Supporting this activity is an increasing number of global partner events, growth in the partner management team and the establishment by one strategic partner of a centre of excellence as they start their fourth implementation of AAH for our shared clients.

Microgen Financial Systems Disposal ('MFS Disposal')

MFS Disposal: Overview of transaction

The disposal of Microgen Financial Systems was completed on 28 June 2019 to Moscow Bidco Limited, a newly incorporated private limited company controlled by funds advised by Silverfleet Capital Partners LLP. Aggregate cash consideration was £51.4 million and net cash proceeds arising from the disposal of £48.4 million (£51.4 million cash consideration less fees of £3.0 million incurred in respect of the disposal and demerger process (which was run in parallel with the disposal to fulfil Aptitude Software's commitment to the demerger)) with other separation costs of approximately £0.4 million. Cash within the Microgen Financial Systems business at the point of disposal was £4.3 million.

Included within profit from discontinued operations of £22.4 million (H1 2018: £2.3 million) is the gain on the disposal of Microgen Financial Systems of £20.3 million, calculated after the transaction fees of £3.0 million and £0.4 million other separation costs.

The disposal is a major milestone in the Group's long-term strategy and represents the start of a new era which sees the Aptitude Software business become the total focus of the Group.

 

MFS Disposal: Performance in period

The financial results of Microgen Financial Systems for the period to disposal are included within the profit from discontinued operations of £22.4 million (H1 2018: £2.3 million).

Microgen Financial Systems' revenue in the period from 1 January 2019 to 28 June 2019 was £8.1 million (H1 2018: £9.5 million) with adjusted operating profit of £3.2 million (H1 2018: £3.6 million). Microgen Financial Systems' statutory operating profit for the period from 1 January 2019 to 28 June 2019, excluding the transaction fees and other de-merger costs of the disposal, was £2.7 million (H1 2018: £3.0 million). Microgen Financial Systems' financial performance for H1 2018 included revenue and statutory operating profit from its Payments business, disposed in July 2018, of £0.8 million and £0.6 million respectively.

MFS Disposal: Return of proceeds to shareholders

Aptitude Software announced on 28 June 2019 that it was proposing to return approximately £45 million to shareholders by a 'B' share scheme. Further details will be provided shortly with the return of proceeds expected to be completed in August 2019.

Financial Performance

Aptitude Software's overall revenue for the six months ended 30 June 2019 has increased by 13% to £28.8 million (H1 2018: £25.4 million). On a Constant Currency basis revenue for the period was £28.5 million, growth of 12%. Adjusted Operating Profit for the period increased by 31% to £5.1 million (H1 2018: £3.9 million) with Adjusted Operating Profit on a Constant Currency basis of £5.0 million.  Operating profit on a statutory basis was £4.6 million (H1 2018: £3.3 million) after non-underlying items of £0.4 million (H1 2018: £0.6 million) comprised principally of intangible amortisation.

Adjusted Operating Margin in H1 2019 increased to 18% (H1 2018: 15%), benefitting from increasing scale and an improving proportion of higher margin software and subscription revenue as a total of revenue. The Group continues to monitor the balance of investment in the opportunity for the business and the growth in Aptitude Software's operating margins.

Profit from discontinued operations of £22.4 million (H1 2018: £2.3 million) comprises the gain on the disposal of Microgen Financial Systems (£20.3 million) and Microgen Financial Systems' profit after tax for the period up to disposal (£2.1 million).

The Group reported a profit for the period attributable to equity shareholders of £25.8 million (H1 2018: £4.8 million). The Board has continued to determine that all internal research and development costs are expensed as incurred and therefore the Group has no capitalisation of development expenditure.

The total tax charge of £1.1 million (H1 2018: £0.7 million) represents 24.0% of the Group's profit before tax (H1 2018: 21.0%), with the increase due to the growing proportion of profits in overseas territories with higher prevailing tax rates, especially in the US.

The Group continues to have a strong balance sheet with net assets at 30 June 2019 of £88.4 million (H1 2018: £56.5 million), including cash at 30 June 2019 of £69.9 million (H1 2018: £11.6 million), and net funds at 30 June 2019 of £67.4 million (H1 2018: net debt of £1.5 million). Cash generated from operations improved to £7.0 million (H1 2018: cash used in operations of £1.1 million), of which £3.9 million is in relation to the continuing business. This in line with expectations and consistent with the cash flow profile of the Group where material software and subscription receipts are received in the final months of the year in advance of a concentration of annual renewals aligned with the calendar year.

 

Trade receivables have reduced to £12.3 million (H1 2018: £16.2 million of which £13.4 million is in respect of continuing operations), a reduction of £1.1 million on a like for like basis due to the timing of a number of customer payments. The Group's cash collection disciplines remain strong with like for like DSO (debtor days) at 30 June 2019 of 59 consistent with prior periods. Deferred income at 30 June 2019 was £21.2 million (H1 2018: £26.0 million of which £16.7 million is in respect of continuing operations), an increase of £4.5 million on a like for like basis consistent with the growth of ARR.

Dividend

With the disposal of Microgen Financial Systems, and its accompanying profits (representing 44% of the Group's 2018 Adjusted Operating Profit), the Board has reviewed Aptitude Software's on-going dividend policy and determined to maintain dividend cover. As a result, the interim dividend for 2019 will be reduced to 1.80 pence (2018: 2.2 pence). The interim dividend will be payable on 4 October 2019 to shareholders on the register at the close of business on 6 September 2019, by which time the 'B' share scheme is expected to have completed.

Statement on Principal Risks and Uncertainties

Pursuant to the requirements of the Disclosure and Transparency Rules the Group provides the following information on its principal risks and uncertainties.  The Group considers strategic, operational and financial risks and identifies actions to mitigate those risks.  These risk profiles are updated at least annually.  The principal risks and uncertainties detailed within the Group's 2018 Annual Report remain applicable for the first six months of the financial year.  The Group's 2018 Annual Report is available from the Aptitude Software website: www.aptitudesoftware.com/investor-relations/

Related party transactions during the period are disclosed in Note 19.

Outlook

After an excellent performance in the first half of 2019 the opportunity for Aptitude Software remains significant in all regions. Benefitting from its growing product portfolio, increasing geographic presence and global partnership network the Group looks forward confidently to achieving continued success in the second half of 2019 and future years.

 

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

For the six months ended 30 June 2019

 

 

 

Unaudited six months ended 30 Jun 2019

 

Unaudited six months ended 30 Jun 2018*

 

Audited year ended 31 Dec 2018*

 

 

Note

Before

Non-underlying items

 

Non-underlying items

 

Total

 

Before

Non-underlying items

 

Non-underlying items

 

Total

 

Before

Non-underlying items

 

Non-underlying items

 

Total

Profit before income tax

 

4,836

 

(423)

 

4,413

 

3,677

 

(558)

 

3,119

 

8,372

 

(1,109)

 

7,263

Profit for the period

 

6,339

 

19,448

 

25,787

 

5,686

 

(914)

 

4,772

 

12,236

 

1,557

 

13,793

 

* Amounts displayed within the prior periods have been restated for the disposal of Microgen Financial Systems on 28 June 2019 which met the criteria of being presented as a discontinued operation. See note 18 for details. 

       

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2019

 

 

 

Unaudited

six months

ended

 

Unaudited

six months

ended

 

Audited

year

ended

 

 

30 Jun

 2019

 

30 Jun

 2018

 

31 Dec

2018

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Profit for the period

 

25,787

 

4,772

 

13,793

Other comprehensive income

 

 

 

 

 

 

Items that may subsequently be reclassified to profit or loss:

 

 

 

 

 

 

Fair value gain/(loss) on hedged financial instruments

 

88

 

(186)

 

(14)

Currency translation difference

 

(167)

 

(548)

 

(381)

Other comprehensive income/(expense) from discontinued operations

 

22

 

(3)

 

11

Other comprehensive (expense)/income for the period, net of tax

 

(57)

 

(737)

 

(384)

 

Total comprehensive income for the period

 

25,730

 

4,035

 

13,409

 

 

 

 

 

 

 

Total comprehensive income for the period

arises from:

Continuing operations

 

3,275

 

1,730

 

5,021

Discontinued operations

 

22,455

 

2,305

 

8,388

 

 

25,730

 

4,035

 

13,409

 

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

As at 30 June 2019

 

 

 

 

Note

Unaudited

as at

30 Jun 2019*

 

Unaudited

as at

30 Jun 2018

 

Audited

as at

31 Dec 2018

ASSETS

 

£000

 

£000

 

£000

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

11

3,653

 

5,630

 

5,417

Goodwill

 

23,787

 

52,801

 

48,793

Intangible assets

 

6,909

 

15,150

 

14,186

Other long-term assets

 

1,729

 

1,235

 

1,581

Deferred tax assets

 

819

 

1,441

 

1,137

 

 

36,897

 

76,257

 

71,114

Current assets

 

 

 

 

 

 

Trade and other receivables

12

15,404

 

19,148

 

14,675

Financial assets

 

 

 

 

 

 

- derivative financial instruments

 

176

 

8

 

114

Current income tax assets

 

980

 

502

 

1,535

Cash and cash equivalents

 

69,897

 

11,640

 

29,186

Total current assets

 

86,457

 

31,298

 

45,510

Total assets

 

123,354

 

107,555

 

116,624

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 - borrowings

14

-

 

(2,040)

 

(2,040)

 - derivative financial instruments

 

(19)

 

(108)

 

(12)

Trade and other payables

13

(29,642)

 

(32,827)

 

(35,484)

Capital lease obligations

15

(865)

 

(1,145)

 

(1,109)

Current income tax liabilities

 

(316)

 

(188)

 

(489)

 

 

(30,842)

 

(36,308)

 

(39,134)

Net current assets/(liabilities)

 

55,615

 

(5,010)

 

6,376

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Financial liabilities - borrowings

14

-

 

(6,798)

 

(5,818)

Capital lease obligations

15

(1,676)

 

(3,206)

 

(2,846)

Provisions

16

(291)

 

(401)

 

(424)

Deferred tax liabilities

 

(2,142)

 

(4,296)

 

(3,582)

 

 

(4,109)

 

(14,701)

 

(12,670)

NET ASSETS

 

88,403

 

56,546

 

64,820

 

 

* As previously reported, amounts as at 30 June 2019 exclude balances attributable to the Microgen Financial Systems business which was disposed of on 28 June 2019. See note 18 for details.
 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

As at 30 June 2019

 

 

 

Unaudited

as at

30 Jun 2019

 

Unaudited

as at

30 Jun 2018

 

Audited

as at

31 Dec 2018

 

Note

£000

 

£000

 

£000

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Share capital

17

3,994

 

3,940

 

3,958

Share premium account

17

6,492

 

6,481

 

6,488

Capital redemption reserve

 

12,372

 

12,372

 

12,372

Other reserves

 

34,353

 

34,093

 

34,265

Retained earnings

 

31,610

 

114

 

8,010

Foreign currency translation reserve

 

(418)

 

(454)

 

(273)

TOTAL EQUITY

 

88,403

 

56,546

 

64,820

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2019

 

 

 

 

   Share capital

Share
premium account

Retained earnings

Foreign currency translation reserve

Capital redemption reserve

Other
reserves

Total

 

 

£000

£000

£000

£000

£'000

£000

£000

 

 

 

 

 

 

 

 

 

Total equity as at 1 January 2019

 

3,958

6,488

8,010

(273)

12,372

34,265

64,820

Comprehensive income

 

 

 

 

 

 

 

 

Profit for the period

 

-

-

25,787

-

-

-

25,787

Cash flow hedges

 

 

 

 

 

 

 

 

 - net fair value gains

 

-

-

-

-

-

88

88

Exchange rate adjustments

 

-

-

-

(145)

-

-

(145)

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

-

-

25,787

(145)

-

88

25,730

Shares issued under share option schemes

 

36

4

-

-

-

-

40

Share options - value of employee service

 

-

-

528

-

-

-

528

Dividends to equity holders of the company

 

-

-

(2,715)

-

-

-

(2,715)

 

 

 

 

 

 

 

 

 

Total contributions by and distributions to owners of the company recognised directly into equity

 

36

4

(2,187)

-

-

-

(2,147)

Balance at 30 June 2019 (unaudited)

 

3,994

6,492

31,610

(418)

12,372

34,353

88,403

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2018

 

 

 

 

   Share capital

Share
premium account

Retained earnings

 

Foreign currency translation reserve

Capital redemption reserve

Other
reserves

Total

 

 

£000

£000

£000

£000

£'000

£000

£000

 

 

 

 

 

 

 

 

 

Total equity as at 1 January 2018

 

3,939

6,449

(2,712)

97

12,372

34,279

54,424

Comprehensive income

 

 

 

 

 

 

 

 

Profit for the period

 

-

-

4,772

-

-

-

4,772

Cash flow hedges

 

 

 

 

 

 

 

 

 - net fair value losses

 

-

-

-

-

-

(186)

(186)

Exchange rate adjustments

 

-

-

-

(551)

-

-

(551)

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

-

-

4,772

(551)

-

(186)

4,035

Shares issued under share option schemes

 

1

32

-

-

-

-

33

Share options - value of employee service

 

-

-

642

-

-

-

642

Dividends to equity holders of the company

 

-

-

(2,588)

-

-

-

(2,588)

 

 

 

 

 

 

 

 

 

Total contributions by and distributions to owners of the company recognised directly in equity

 

1

32

(1,946)

-

-

-

(1,913)

Balance at 30 June 2018

(unaudited)

 

3,940

6,481

114

(454)

12,372

34,093

56,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

For the six months ended 30 June 2019

 

 

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

six months ended

 

six months ended

 

year

ended

 

Note

 

30 Jun 2019

 

30 Jun 2018

 

31 Dec 2018

 

 

 

£000

 

£000

 

£000

Cash flows from operating activities

 

 

 

 

 

 

 

Cash generated from/(used in) operations

9

 

6,992

 

(1,098)

 

15,042

Interest paid

 

 

(307)

 

(253)

 

(440)

Income tax paid

 

 

(1,199)

 

(1,220)

 

(3,068)

 

 

 

 

 

 

 

 

Net cash flows generated from/(used in) operating activities

 

 

5,486

 

(2,571)

 

11,534

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(429)

 

(508)

 

(985)

Disposal of subsidiaries, net of cash disposed

     18

 

47,152

 

-

 

6,770

Interest received

 

 

57

 

18

 

47

Net cash generated from/(used in) investing activities

 

 

46,780

 

(490)

 

5,832

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Net proceeds from issuance of ordinary shares

17

 

40

 

33

 

58

Dividends paid to company's shareholders

10

 

(2,715)

 

(2,588)

 

(3,928)

Repayment of capital lease obligations

 

 

(607)

 

(666)

 

(1,314)

Repayments of loan

 

 

(8,000)

 

(1,000)

 

(2,000)

Net cash used in financing activities

 

 

(11,282)

 

(4,221)

 

(7,184)

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

 

40,984

 

(7,282)

 

10,182

Cash and cash equivalents at beginning of period

 

 

29,186

 

19,137

 

19,137

Exchange rate losses on cash and cash equivalents

 

(273)

 

(215)

 

(133)

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

69,897

 

11,640

 

29,186

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

1.         General information

 

Aptitude Software Group plc (the 'Company') and its subsidiaries (together, the 'Group') is a specialist provider of powerful financial management software to large global businesses.

The Company is a public limited company incorporated and domiciled in England and Wales with a primary listing on the London Stock Exchange. The address of its registered office is Old Change House, 128 Queen Victoria Street, London, England, EC4V 4BJ.

These condensed consolidated interim financial statements were approved for issue on 23 July 2019.

These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2018 were approved by the Board of directors on 22 March 2019 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

These condensed consolidated interim financial statements have been reviewed, not audited.

 

2.         Basis of preparation

 

These condensed consolidated interim financial statements for the six months ended 30 June 2019 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim financial reporting' as adopted by the European Union. These condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2018, which have been prepared in accordance with IFRSs as adopted by the European Union.

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its condensed consolidated interim financial statements.

 

3.         Accounting policies

 

The accounting policies adopted are consistent with those of the previous financial statements, except as described below.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profits.

New and amended standards and interpretations need to be adopted in the first interim financial statements issued after their effective date. There are no new IFRSs or IFRICs that are effective for the first time for this interim period that would be expected other than IFRS 16. The Group took the decision to early adopt the standard with an effective date from 1 January 2018.

 

4.         Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2018, with the exception of changes in estimates that are required in determining the provision for income taxes.

Fair value estimation

Financial instruments not measured at fair value

Financial instruments not measured at fair value includes cash and cash equivalents, trade and other receivables, trade and other payables, and loans and borrowings. However, due to their short-term nature and ability to be liquidated at short notice their carrying value approximates to their fair value.

 

Financial instruments measured at fair value

The fair value hierarchy of the financial instruments measured at fair value is provided below.

 

 

Level 2 inputs

 

Unaudited

six months

ended
30 Jun 2019

£'000

Unaudited

six months

ended

30 Jun 2018

£'000

Financial assets

 

 

Derivative financial assets (designated hedge instruments)

176

8

 

176

8

 

Financial liabilities

 

 

Derivative financial liabilities (designated hedge instruments)

(19)

(108)

 

(19)

(108)

 

The derivative financial assets and liabilities have been valued using the market approach and are considered to be Level 2 inputs. There were no changes to the valuation techniques used in the year. There were no transfers between levels during the year.
 

5.         Segmental information

 

During the first half of 2019 Aptitude Software Group plc operated two businesses, Aptitude Software and Microgen Financial Systems, both of which were considered operating segments based on the reports the Group received from management to make strategic decisions. With the disposal of Microgen Financial Systems on 28 June 2019, the only continuing business segment in the six months ended 30 June 2019 was Aptitude Software and therefore no segmental analysis is provided for this period.

 

6.         Non-underlying items

 

 

 

Unaudited
six months

ended 30 Jun 2019

 

Unaudited

six months

ended 30 Jun 2018

 

Audited

year

ended 31 Dec 2018

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

From continuing operations

 

 

 

 

 

 

Amortisation of acquired intangibles

 

423

 

424

 

846

Share based payments on share options

issued in 2013

 

-

 

60

 

101

Acquisition and associated restructuring costs

 

-

 

74

 

162

 

 

423

 

558

 

1,109

From discontinued operations*

 

 

 

 

 

 

Amortisation of intangibles

 

540

 

546

 

1,092

Acquisition and associated restructuring costs

 

-

 

52

 

-

Gain on disposal of subsidiary

 

(20,309)

 

-

 

(3,237)

 

 

(19,769)

 

598

 

(2,145)

 

 

 

 

 

 

 

Total non-underlying (income)/expense

 

(19,346)

 

1,156

 

(1,036)

 

*Amounts displayed under non-underlying items on the face of the income statement are net of tax.

 

7.         Income tax expense

 

Income tax expense is recognised based on management's estimate of the weighted average income tax rate expected for the full financial year of 24% (the estimated tax rate for the six months ended 30 June 2018 was 21%). The increase from the prior year is due to the growing proportion of profits in overseas territories with higher prevailing tax rates, especially in the US. The weighted average income tax rate applied to discontinued operations for the six months ended 30 June 2019 is 20% (21% for the six months ended 30 June 2018).

 

8.          Earnings per share

 

Unaudited six months ended

30 Jun 2019

 

Unaudited six months ended 30 Jun 2018

 

Audited

year ended

31 Dec 2018

 

 

 

pence

 

pence

 

pence

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

Basic

 

 

 

 

 

 

From continuing operations

 

5.5

 

4.0

 

8.9

From discontinued operations

 

36.7

 

3.8

 

13.7

 

 

42.2

 

7.8

 

22.6

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

From continuing operations

 

5.2

 

3.8

 

8.5

From discontinued operations

 

35.0

 

3.6

 

13.0

 

 

40.2

 

7.4

 

21.5

Adjusted earnings per share

 

 

 

 

 

 

Basic

 

 

 

 

 

 

From continuing operations

 

6.0

 

4.7

 

10.2

From discontinued operations

 

4.1

 

4.6

 

9.2

 

 

10.1

 

9.3

 

19.4

Diluted

 

 

 

 

 

 

From continuing operations

 

5.7

 

4.5

 

9.7

From discontinued operations

 

4.0

 

4.3

 

8.7

 

 

9.7

 

8.8

 

18.4

 

To provide an indication of the underlying operating performance the adjusted earnings per share calculation above excludes intangible amortisation and other non-underlying items and has a tax charge based on the effective rate.

 

 

Unaudited six months ended

30 Jun 2019

 

Unaudited six months ended 30 Jun 2018

 

Audited

year ended

31 Dec 2018

 

 

pence

 

pence

 

pence

 

 

 

 

 

 

 

Basic earnings per share

 

42.2

 

7.8

 

22.6

Non-underlying items

 

1.2

 

1.5

 

(2.5)

Gain on sale of subsidiary

 

(33.3)

 

-

 

-

Change in accounting policies

 

-

 

-

 

(0.4)

Prior years' tax credit

 

-

 

-

 

(0.2)

Tax losses recognised

 

-

 

-

 

(0.1)

Adjusted earnings per share

 

10.1

 

9.3

 

9.         Cash generated from operations

 

 

Unaudited

six months ended

30 Jun 2019

 

Unaudited

six months ended

30 Jun 2018

 

Audited

year

ended

31 Dec 2018

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Profit before tax for the period from:

 

 

 

 

 

 

Continuing operations

 

4,413

 

3,119

 

7,263

Discontinued operations

 

22,964

 

2,922

 

9,079

Profit before tax including discontinued operations

 

27,377

 

6,041

 

16,342

 

 

 

 

 

 

 

Adjusted for:

 

 

 

 

 

 

Depreciation

 

1,012

 

938

 

1,869

Amortisation

 

963

 

970

 

1,938

Share-based payment expense

528

 

642

 

1,074

Gain on sale of subsidiary

 

(20,309)

 

-

 

(3,237)

Finance income

 

(57)

 

(18)

 

(47)

Finance costs

 

307

 

253

 

480

 

 

 

 

 

 

 

Changes in working capital:

 

 

 

 

 

 

Increase in receivables

 

(3,549)

 

(5,614)

 

(2,040)

Decrease in payables

 

721

 

(4,307)

 

(1,357)

(Decrease)/increase in provisions

 

(1)

 

(3)

 

20

 

 

 

 

 

 

 

Cash generated from/(used in) operations

 

6,992

 

(1,098)

 

15,042

 

10.       Dividends

 

The interim dividend of 1.8 pence per share (2018: 2.2 pence per share) was approved by the Board on 23 July 2019. It is payable on 4 October 2019 to shareholders on the register at 6 September 2019.  This interim dividend has not been included as a liability in this interim financial information.  It will be recognised in shareholders' equity in the year to 31 December 2019.


The dividend that relates to the period to 31 December 2018 and that amounted to £2,715,000 (2018: final dividend £2,588,000) was paid in May 2019.

11.       Property, plant and equipment

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

 

 

£000

 

£000

Opening net book amount 1 January

 

 

 

          5,417

 

          5,543

Additions

 

 

 

               429

 

               1,027

Disposal of subsidiary

 

 

 

           (1,213)

 

                   -

Net disposals

 

 

 

(13)

 

(34)

Exchange movements

 

 

 

45

 

32

Depreciation

 

 

 

(1,012)

 

(938)

Closing net book amount 30 June (unaudited)

 

3,653

 

5,630

               

 

The Group has not placed any contracts for future capital expenditure which have not been provided for in the financial statements.

 

12.       Trade and other receivables      

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

 

 

£000

 

£000

Trade receivables - net

 

 

 

          12,331

 

          16,164

Other receivables

 

 

 

             1,012

 

             1,158

Prepayments

 

 

 

656

 

974

Accrued income

 

 

 

1,405

 

852

Closing net book amount 30 June (unaudited)

 

15,404

 

19,148

 

Contract assets and contract liabilities only comprise accrued and deferred income respectively.

 

Within the trade receivables balance of £12,331,000 (30 June 2018: £16,164,000, of which £13,367,000 is in respect of continuing operations) there are balances totalling £2,217,000 (30 June 2018: £2,840,000, of which £1,887,000 is in respect of continuing operations) which, at 30 June 2019 were overdue for payment.

 

13.       Trade and other payables

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

 

 

£000

 

£000

Trade payables

 

 

 

          941

 

          1,243

Other tax and social security payable

 

 

 

             1,024

 

             1,150

Other payables

 

 

 

               882

 

               205

Accruals

 

 

 

5,589

 

4,243

Deferred income

 

 

 

21,206

 

25,986

Closing net book amount 30 June (unaudited)

 

29,642

 

32,827

 

Within the deferred income and accruals balances of £25,986,000 and £4,243,000 respectively at 30 June 2018, £16,651,000 and £3,689,000 is in respect of continuing operations. The accruals balance at 30 June 2019 includes £2,568,000 of accrued costs in relation to the disposal of Microgen Financial Systems.

 

14.       Financial liabilities

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

 

 

£000

 

£000

Bank Loan

 

 

 

-

 

8,838

 

 

 

 

 

 

 

The borrowings are repayable as follows:

 

 

 

 

 

 

Within one year

 

 

 

-

 

2,040

In the second year

 

 

 

-

 

            2,040

In the third to fifth years inclusive

 

 

 

-           

 

4,920           

 

 

 

 

-

 

           9,000

Unamortised prepaid facility arrangement fees

 

-

 

(162)

As at 30 June

 

 

 

-

 

8,838

 

On 10 May 2019, the Group settled its outstanding term loan facility in full in order to release the charges held over the Group as part of the preparation for the disposal of the Microgen Financial Systems business.

15.       Capital lease obligations

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

 

 

 

£000

 

£000

 

Amounts payable under capital lease arrangements:

 

 

 

 

 

 

 

Within one year

 

 

 

948

 

1,292

 

Within two to five years

 

 

 

1,473

 

2,756

 

After five years

 

 

 

344

 

735

 

Total

 

 

 

2,765

 

4,783

 

Less: future finance charges

 

(224)

 

(432)

 

 

Present value of lease obligations

 

2,541

 

4,351

 

Less: Amount due for settlement within 12 months (shown under current liabilities

 

(865)

 

(1,145)

 

As at 30 June

 

 

 

1,676

 

3,206

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

 

 

 

£000

 

£000

 

The present value of financial lease liabilities is split as follows

 

 

 

 

 

Within one year

 

865

 

1,145

 

Within two to five years

 

1,343

 

2,503

 

After five years

 

333

 

703

 

 

 

2,541

 

4,351

 

 

16.       Provisions for other liabilities and charges

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months

ended
30 Jun 2018

 

 

 

 

£000

 

£000

At 1 January

 

 

 

                  424

 

                  404

Disposal of subsidiary

 

 

 

(132)

 

-

Exchange movements

 

 

 

(1)

 

(3)

At 30 June

 

 

 

291

 

401

 

16.       Provisions for other liabilities and charges (continued)

Provisions have been analysed between current and non-current as follows:

 

 

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

 

 

£000

 

£000

Current

 

 

 

-

 

-

Non-current

 

 

 

291

 

401

At 30 June

 

 

 

291

 

401

£242,000 of the total provision at 30 June 2019 of £291,000 relates to the cost of dilapidations in respect of its occupied leasehold premises (30 June 2018: £365,000).

 

17.       Share capital

 

Unaudited
six months ended
30 Jun 2019

Unaudited
six months ended
30 Jun 2018

Ordinary share capital at 6 3/7 pence each

 

Number of shares

 

Ordinary Shares

 

Number

of shares

 

Ordinary Shares

 

000

 

£000

 

000

 

£000

Issued and fully paid:

 

 

 

 

 

 

 

 

Opening balance as at 1 January

 

61,173

 

3,932

 

60,878

 

3,913

Shares issued under share option schemes

 

555

 

36

 

17

 

1

At 30 June (unaudited)

 

61,728

 

3,968

 

60,895

 

3,914

 

 

 

 

 

 

 

 

 

Shares to be issued

 

 

 

 

 

 

 

 

Deferred equity consideration on acquisition

 

399

 

26

 

399

 

26

Closing balance as at 30 June (unaudited)

 

62,127

 

3,994

 

61,294

 

3,940

                   

Employee share option scheme: options were exercised during the period to 30 June 2019 resulted in 554,710 shares being issued (30 June 2018: 16,665), with exercise proceeds of £40,000. The related weight average share price at the time of exercise was £3.88 per share.                

 

Share premium                                                      

 

 

Unaudited
six months ended
30 Jun 2019

 

Unaudited
six months ended
30 Jun 2018

 

 

£000

 

£000

Opening balance as at 1 January

 

6,488

 

6,449

Movement in relation to share options exercised

 

 4

 

 32

Closing balance as at 30 June (unaudited)

 

6,492

 

6,481

18. Discontinued operations

 

18(a) Description

 

On 30 May 2019, the Group announced that it had entered into an agreement to sell the entire issued share capital of Microgen Financial Systems Limited, to Moscow Bidco Limited, a newly incorporated private limited company controlled by Silverfleet Capital Partners LLP, for consideration of £51.4 million. The Disposal was approved by Aptitude Software Group plc's shareholders at a General Meeting held on 24 June 2019, with completion of the disposal effective on 28 June 2019 and is reported in the current period as a discontinued operation. Financial information relating to the discontinued operation for the period to the date of disposal is set out below, with the gain on disposal being presented within the profit from discontinued operation (see analysis in 18(b) below).

 

18(b) Financial performance and cash flow information

 

The financial performance and cash flow information presented are for the period 1 January 2019 to 28 June 2019 (six months ended 30 June 2019 column) along with the six month period ending 30 June 2018 and year ended 31 December 2018.

 

 

 

Unaudited

six months ended

30 Jun 2019

 

Unaudited

six months ended

30 Jun 2018

 

Audited

year

ended

31 Dec 2018

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Revenue

 

8,089

 

9,508

 

18,012

Operating costs

 

(4,867)

 

(5,943)

 

(11,048)

Adjusted operating profit

 

3,222

 

3,565

 

6,964

Non-underlying items

 

(540)

 

(598)

 

(1,092)

Gain on disposal of subsidiary

-

 

-

 

3,237

Operating profit

 

2,682

 

2,967

 

9,109

Finance income

 

2

 

1

 

1

Finance costs

 

(29)

 

(46)

 

(31)

Profit before income tax

 

2,655

 

2,922

 

9,079

Income tax expense

 

(531)

 

(614)

 

(702)

Profit after tax

 

2,124

 

2,308

 

8,377

Gain on disposal (see (c) below)

 

20,309

 

-

 

-

Profit from discontinued operations

 

22,433

 

2,308

 

8,377

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

Items that may subsequently be reclassified to profit or loss:

 

 

 

 

 

 

Currency translation difference

 

22

 

(3)

 

11

 

 

22,455

 

2,305

 

8,388

 

 

18. Discontinued operations (continued)

 

18(b) Financial performance and cash flow information (continued)

 

Cash flow statement

 

Unaudited

six months ended

30 Jun 2019

 

Unaudited

six months ended

30 Jun 2018

 

Audited

year

ended

31 Dec 2018

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Net cash generated from operating activities

 

3,125

 

2,662

 

6,776

Net cash generated from/(used in) investing activities (2019 includes an inflow of £47,152,000 from the sale)

 

47,078

 

(130)

 

6,617

Net cash generated from/ (used in) financing activities

 

554

 

(4,511)

 

(14,781)

Net increase/(decrease) in cash generated by the subsidiary

 

50,757

 

(1,979)

 

(1,388)

18. Discontinued operations (continued)

 

18(c) Details of the disposal of the subsidiary

 

The book value of the net assets disposed of in the transaction and the gain arising on disposal are as follows:

 

Book value

£000

Net assets disposed

 

Non-current assets

 

Property, plant and equipment

1,213

Intangible assets

6,310

Other long-term assets

257

Deferred income tax asset

322

 

8,102

Current assets

 

Trade and other receivables

3,267

Cash and cash equivalents

4,259

 

7,526

Current liabilities

 

Trade and other payables

(973)

Deferred income

(8,326)

Current income tax liabilities

(1,204)

 

(10,503)

Long term liabilities

 

Provisions

(132)

Capital lease obligations

(815)

Deferred tax liability

(1,434)

 

(2,381)

Net assets before goodwill allocation

2,744

Goodwill

25,006

Total net assets on disposal

27,750

 

 

Consideration received

 

 

 

£000

Proceeds received on completion

 

 

51,411

Directly attributable costs incurred (incl. transaction fees and restructuring costs)

 

 

 

(3,352)

Net consideration received

 

 

48,059

 

 

 

 

Gain on disposal

 

 

20,309

 

19.       Related party transactions

 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.

 

During 2019, the Group entered into transactions with a subsidiary of FDM Group (Holdings) plc, a Company for which Peter Whiting (non-executive Director) is currently a non-executive Director. Ivan Martin (Chairman) also acted as a non-executive Director during 2019 but stood down from his role on 5 March 2019. FDM Group (Holdings) plc provided consultancy services to the Group during the six month period ended 30 June 2019 at a cost of £219,000 (Six months ended 30 June 2018: £43,000).

 

During 2019, the Group entered into transactions with Phoenix Johnson Ltd, a Company for which Naomi Johnson (an experienced facility management professional), the wife of Tom Crawford (Director), is both the sole shareholder and an employee. Phoenix Johnson Ltd provided consultancy services to Aptitude Software Group plc during the six month period ended 30 June 2019 at a cost of £28,000 (Six months ended 30 June 2018: £40,000).

 

There were no other related party transactions during the six month period ended 30 June 2019 (30 June 2018: £nil), as defined by International Accounting Standard No 24 'Related Party Disclosures', except for key management compensation. The related party transactions for the year ended 31 December 2018 as defined by International Accounting Standard No 24 'Related Party Disclosures' are disclosed in note 32 of the Aptitude Software Group plc Annual Report for the year ended 31 December 2018.

20.       Statement of directors' responsibilities

 

The Directors confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

-                 an indication of important events that have occurred during the first six months and their impact on the condensed set of 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.

The Directors of Aptitude Software Group plc are listed in the Aptitude Software Group plc Annual Report for 31 December 2018. A list of current directors is maintained on the Aptitude Software Group plc website: www.aptitudesoftware.com/investor-relations/

Copies of this statement are being posted to shareholders and will also be available on the investor relations page of our website (www.aptitudesoftware.com/investor-relations/).  Further copies are available from the Company Secretary at Old Change House, 128 Queen Victoria Street, London, England, EC4V 4BJ.

 

By order of the Board

 

P Wood

23 July 2019

Deputy Chief Executive Officer and Chief Financial Officer

 

 

Independent review report to Aptitude Software Group plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Aptitude Software Group plc's condensed consolidated interim financial statements (the "interim financial statements") in the Interim Results of Aptitude Software Group plc for the 6 month period ended 30 June 2019. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

·    the condensed consolidated interim balance sheet as at 30 June 2019;

·    the condensed consolidated interim income statement and condensed consolidated interim statement of comprehensive income for the period then ended;

·    the condensed consolidated interim statement of cash flows for the period then ended;

·    the condensed consolidated interim statement of changes in equity for the period then ended; and

·    the explanatory notes to the interim financial statements.

The interim financial statements included in the Interim Results have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The Interim Results, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the Interim Results based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

 

 

What a review of interim financial statements involves

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, 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.

We have read the other information contained in the Interim Results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

 

PricewaterhouseCoopers LLP

Chartered Accountants

Reading

23 July 2019

 


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Interim Results - RNS