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Blue Prism Group PLC  -  PRSM   

Full Year Results

Released 07:00 24-Jan-2017

RNS Number : 9055U
Blue Prism Group PLC
24 January 2017
 

24 January 2017

 

Blue Prism Group plc

("Blue Prism" or the "Group")

 

Full Year Results

Blue Prism (AIM: PRSM), a global leader in Robotic Process Automation ("RPA"), is pleased to announce its full year results for the year ended 31 October 2016.

Financial Highlights

·      Total contracted revenue increased 205% to £35.2m (FY15: £11.5m)

·      Recognised revenue increased 59% to £9.6m (FY15: £6.1m)

·      Recurring revenue now 85% of total revenues (FY15: 61%)

·      Exit recurring licence run-rate increased 143% to £946k per month at 31 October 2016 (31 October 2015: £390k per month)

·      Operating loss of £5.3m, after share-based costs of £362k and IPO costs of £502k (FY15 loss: £0.8m)

·      Adjusted operating loss of £4.4m (FY15: loss £0.7m)

·      Cash and cash equivalents at 31 October 2016 were £11.8m (31 October 2015: £2.4m)

Operational Highlights

·      Won 96 new customers, with 12 renewals and the total customer base increasing to 153 (FY15: 57)

·      81 upsells across 47 existing customers

·      Continued growth in the US - won 18 new customers; 19 upsells

·      Over 90% of new customers acquired through channel partner ecosystem

·      Emerging and exciting global RPA market - increasing competition helping to validate the market

·      Successfully launched version 5.0 focusing on enterprise-level differentiators

·      Global employee base doubled from 43 to 86

 

Alastair Bathgate, CEO, commented: "We are delighted with Blue Prism's performance for the year ended 31 October 2016, our first as a publicly listed company. The Group outperformed its targets for the period across all areas of the business, both operationally and financially. Our strategy to move to a wholly indirect sales model has been very successful with our partner network delivering over 90% of new business in a year in which customer numbers increased by 96 to 153.

"The RPA market continues to grow, and whilst this is generating increased competition, we believe Blue Prism is well positioned and sufficiently differentiated to take advantage of this growth through continued product innovation and marketing. To drive continued growth in our indirect sales model, our primary investment focus remains on building our global sales team which manages our partner relationships.

"Taking into consideration the FY16 exit monthly run rate and assuming the ongoing momentum in new customer wins and upsells continues, we expect revenue for the current financial year to be comfortably ahead of existing market expectations."

 

For further information please contact:

Blue Prism Group plc

Jason Kingdon, Chairman

Alastair Bathgate, Chief Executive Officer

Gary Johnson, Chief Financial Officer

 

via Newgate Communications

Investec Bank plc

Andrew Pinder

Sebastian Lawrence

Carlton Nelson

 

Tel: +44 (0)20 7597 4000

Newgate Communications

Bob Huxford / Adam Lloyd / Helena Bogle

Tel: +44 (0)20 7653 9850

 

About Blue Prism

Blue Prism Group plc ("Blue Prism" or the "Group"), a UK-headquartered global software company, is a leader in Robotic Process Automation ("RPA"), which enables blue-chip organisations to create a digital workforce powered by Blue Prism's software robots that are trained to automate routine back-office clerical tasks. The Group's enterprise-grade software enables the automation of manual, rules-based, administrative processes to create a more agile, cost effective and accurate back-office. 

Blue Prism's RPA software delivers the world's most successful digital workforce and has executed over 1 billion transactions for our customers, which include Aegon, BNY Mellon, Commerzbank, IBM, ING, Maersk, Nokia, Nordea, Procter & Gamble, Raiffeisen Bank, Siemens, Westpac and Zurich. As at 31 October 2016, Blue Prism had 86 employees based out of offices in Newton le Willows and London (UK) and Miami, Chicago, New York and San Francisco (US).

For more information visit www.blueprism.com and follow the company on LinkedIn and Twitter.

 

 

 

CHAIRMAN'S STATEMENT

I am very pleased to present the full year report on the results of Blue Prism for the year ended 31 October 2016, the first following its IPO on AIM on 18th March 2016.

This was a successful financial year for Blue Prism as businesses worldwide increasingly recognised the many benefits of RPA technology and the transformative advantages provided by Blue Prism's RPA software.

In headline terms, total contracted revenue increased 205% and recognised revenue increased 59%. Underlying this, we brought forward our investment programmes during the year to match the growth of the RPA market primarily through the growth of our US sales team and wider sales & marketing teams. We have doubled staff numbers from 43 to 86 and continued to expand Blue Prism's global partner network. Channel partners were responsible for over 90% of new business within the year and have been operating on an increasingly global basis.

We are also pleased to note that more than 40% of our 189 licence deals in the financial year were to existing customers which is an important validation of the business model and quality of the product offering.

Looking forward, we will continue to invest alongside market developments, further scaling our sales and delivery channels as appropriate. In particular, we will focus on the accreditation of our partners and their employees in order to maintain skills and quality of delivery as the market scales. We will continue to invest in the core technology in order to maintain our position as the leading global RPA technology provider and build on our emerging position as the scalable and robust execution platform for third party Artificial Intelligence and cognitive technologies.

We added strength and depth to the board and I would like to welcome Charmaine Eggberry and Ken Lever as Non-Executive Directors. I would also like to thank our staff and management team, without whose dedication, hard work and energy none of our success during 2016 could have been possible.

Our strong positioning in an emerging and exciting global market sets the scene for another positive year.

Jason Kingdon

Chairman

 

 

 

 

CEO'S STATEMENT

OVERVIEW

The last financial year was billed as a year of expansion and we are pleased to have successfully delivered against the targets we set out at the time of our IPO in March 2016. Since becoming a public company, our corporate profile has increased considerably and we have seen a growing and positive recognition of Blue Prism and a strengthening pipeline.

In FY16, we focused our investments primarily in sales and marketing and in expanding our geographic presence. This will remain a theme of 2017 as we continue to leverage our indirect route to market to address a growing, global, demand for RPA software.

Total contracted revenue for the year ended 31 October 2016 increased by 205% to £35.2m (FY15: £11.5m) and recognised revenue increased by 59% to £9.6m (FY15: £6.1m). This gives us excellent forward revenue visibility, underlining the term licence nature of the business. The exit run rate stood at £946k per month at 31 October 2016, demonstrating continued strong momentum in licence deals, rising 143% in the year (31 October 2015: £390k per month).

MARKET REVIEW

The RPA market continues to demonstrate encouraging signs of entering into rapid growth with organisations increasingly aware of this new technology category and Blue Prism is building on its position as the premium, enterprise-strength product in the market.

Geographically, the Group saw strong demand across North America and Europe with interest emerging in new geographies such as South Africa, Australasia, India, Japan and the Middle East.

RPA market progression has naturally attracted increased competition over the past year which helps to further validate the RPA market that Blue Prism was instrumental in creating. Blue Prism's software continues to be differentiated in the market by its ability to deploy securely, and at scale, in enterprise-sized organisations. The core elements of the product that deliver this value are its security, governance, data integrity, scalability, regulatory compliance and full audit and change management capabilities. Blue Prism has spent many years industrialising its product to this enterprise class level and has invested much resource in educating the market with regard to its differentiation.

Our premium product offering, combined with our global distribution capabilities; significant business momentum; robust balance sheet; and high profile, which in part results from our public listing, puts us in a strong position to capitalise on a market increasingly entering into rapid growth.

OPERATIONAL REVIEW

The Group experienced significant customer momentum in the year, primarily through our channel partner ecosystem. In line with our strategic goals set out at the time of our IPO, we have invested in expanding our sales force and building a scalable channel partner ecosystem. We were pleased that this has resulted in strong growth in licence deals with 189 closed during the financial year, up from 40 in 2015.

Licence deals

FY2016

FY2015

New customers

96

25

Renewals

12

2

Upsells

81

13

Total

189

40

 

 

Deals with or through our channel partners accounted for over 90% of new customers, demonstrating the considerable success of our indirect sales model. This success is further supported by the resources being allocated to Blue Prism sales by global strategic partners and specialist resellers such as Accenture, Alsbridge, Deloitte, Digital Workforce, EY, Hewlett Packard Enterprise, IBM, id. Management, NEOOPS, Reveal Group, Symphony Ventures, The Burnie Group and Thoughtonomy. We are also developing technical partnerships with third party Artificial Intelligence and cognitive products to position Blue Prism as the execution platform at the centre of a smart new digital workforce for the enterprise.

A total of 81 of our licence deals signed during the year were upsells across 47 customers providing evidence that customers are augmenting their initial adoption of robots, rolling them out across increasingly strategic and transformational projects. The Group enjoyed a 100% renewal rate in the period, including renewing the licences of two of our largest customers.

Total customer numbers increased from 57 to 153 across a number of industries such as banking and finance, insurance, healthcare, outsourcing, and government. Notably, many of these customers are in highly regulated industries, validating the robust and secure nature of our enterprise level software.

Professional Services is now largely focussed on partner delivery enablement and certification, quality assurance and the continued development of best practice methodologies and operating models.

The US is a strategic focus for the Group as the world's leading technology economy and has been a key focus of our investment. This has resulted in substantial growth during the period with 28% of the Group's revenue coming from North America, growing from £0.6m in the FY15 to £2.7m for this financial year. Whilst the RPA market in the US is at a more nascent stage than Europe, particularly in the channel partner ecosystem, we see evidence of larger upfront commitments to licence adoption amongst customers. The Group won 18 new customers in North America of which 2 were direct and 16 indirect; and 19 upsells in the year.

Through our global partner network we are seeing demand in new geographies and they have already delivered sales in South Africa, Australia, India and the Middle East, for example. We will seek to strategically invest to support our partners and drive sales in new regions.

To provide a class leading customer service to our growing and increasingly global customer base we have increased the number of support staff and made preparations to roll-out global 24/7 support by adding new centres in Austin, Texas and Sydney, Australia alongside our existing UK customer service operation.

In May 2016, the Group launched version 5.0 of the Blue Prism software platform which included, for example, the ability to allocate and dynamically reallocate work to robot teams across multiple data centres, geographies and the cloud as well as improved new encryption functionality to improve data security and a renewed user interface and technology platform to support new technologies and future versions of the platform. The multi-language capability provided by version 5.0 has allowed us to expand beyond English speaking countries further enabling us to support the global demand for RPA technology.

EMPLOYEES

Staff numbers doubled from 43 to 86 in the financial year. We primarily invested in our global sales and marketing teams in order to serve the substantial opportunities presented by the fast growing market in which we operate. As a result of this investment, the US became our largest single sales force during the financial year.

At the time of the IPO, we implemented an equity ownership scheme for all employees and this policy continues to allow us to attract and retain high quality people in these fast moving market conditions. In this year of rapid expansion and considerable growth, we would like to welcome all our new joiners and thank all Blue Prism employees, new and old, for their considerable dedication, hard work and enthusiasm in growing the business.

EXECUTING OUR STRATEGY

We made substantial progress during the year in the four elements of our strategic focus, communicated at the time of the IPO:

Building a scalable sales and delivery channel

The Group's channel partner model continues to develop well and now accounts for the vast majority of our new business. Our partners provide us with a global, scalable sales and delivery presence as well as domain expertise in industry sectors and geographies, many based on existing and trusted relationships.

We intend to continue to build this partner network further, with the aim of increasing our coverage of different industries and geographies.

As our customer base grows, we are seeing a shortage of Blue Prism skills within the wider market. To help address this, we are developing individual accreditation programmes, providing formal qualifications for the developing of specific Blue Prism skills. We are also rolling out autonomous training kits to enable partners and customers to set up their own internal training operations.

To ensure our customers receive consistent levels of delivery support we are rolling out a partner certification programme in the coming financial year to provide partner capability information and quality assurance to our customers.

Increasing business with the Group's customers

The Group's initial investment in account management resources is showing signs of success with 81 upsells across 47 customers in the period. We also saw evidence that new customers signed through or with global strategic partners are beginning to take larger average initial licence deals.

To help drive continued growth in licences to existing customers we will invest further in account management for our indirect model.

Executing on the Group's US market strategy

The Group has made good progress in the US having secured important direct and indirect reference sites. We have also seen our investment in building out our sales team already reflected in the strong revenue progress in FY16. We continue to view the US as a strategic priority and are investing in sales, marketing and support with a particular focus on developing the indirect channel partner model in the region.

Reinforcing the Group's market leadership to take advantage of RPA market adoption

The Group continued to maintain its premium product and thought-leadership with the launch of version 5.0 in May 2016. This brought recognition at the annual AIconics Awards where Blue Prism was named Best Enterprise Application of Artificial Intelligence.

To ensure that our software remains at the forefront of the industry and that we retain our strong market positioning we will aim to invest 10% of the Group's revenues in product development targeted primarily at further reinforcement of the enterprise strength and scale of the software and to build on its emerging position as the scalable and robust execution platform for third party Artificial Intelligence and cognitive technologies which will form part of the future digital enterprise.

SUMMARY AND OUTLOOK

We are delighted with Blue Prism's performance for the year ended 31 October 2016, our first as a publicly listed company. The Group outperformed its targets for the period across all areas of the business, both operationally and financially. Our strategy to move to a wholly indirect sales model has been very successful with our partner network delivering over 90% of new business in a year in which customer numbers increased by 96 to 153.

The RPA market continues to grow, and whilst this is generating increased competition, we believe Blue Prism is well positioned and sufficiently differentiated to take advantage of this growth through continued product innovation and marketing. To drive continued growth in our indirect sales model, our primary investment focus remains on building our global sales team which manages the partner relationships.

Taking into consideration the FY16 exit monthly run rate and assuming the ongoing momentum in new customer wins and upsells continues, we expect revenue for the current financial year to be comfortably ahead of existing market expectations.

Alastair Bathgate

Chief Executive Officer

 

 

 

 

FINANCIAL REVIEW

INTRODUCTION

We are pleased to present our maiden full year results as a public company. This has been a successful year for the Group with good progress against our financial expectations.

BILLINGS AND FUTURE CONTRACTED REVENUE

The Group saw billings, defined as invoices raised in the period, and future contracted revenues, defined as the future value of the contract which has not yet been invoiced to the customer, grow substantially during the period.

Year ended 31 October (£'000)

2016

2015

Billings

16,748

7,186

Future contracted revenue

18,479

4,343

Total contracted revenue

35,227

11,529

Billings increased 133% to £16.7m against the comparative year (FY15: £7.2m). This increase has largely been driven by new customer wins, which accounted for 35% of total billings. Billings were enhanced by £2.2m as a result of two customer prepayments in the year.

Future contracted revenue increased 325% to £18.5m (FY15: £4.3m) providing the Group with strong revenue visibility.

Total contracted revenue, being the total of billings and future contracted revenue, increased 205% to £35.2m in the year (FY15: £11.5m).

REVENUE

Recognised revenue for the year increased 59% to £9.6m (FY15: £6.1m). As such, over £25.6m of the £35.2m of total contracted revenue during the year is still to be recognised on the income statement.

Recurring licence revenue accounted for 85% of recognised revenues at £8.2m (FY15: 61%). Non-recurring revenue fell to £0.2m (FY15: 1.0m) reflecting our focus on building a predominantly recurring revenue business. Professional Services revenues also reduced slightly to £1.2m (FY15: £1.4m) reflecting our continued transition to an indirect delivery model.

The monthly exit run rate, which illustrates the momentum of recognised recurring licence revenue, stood at £946k for October 2016. This has grown 143% in the year from £390k per month for October 2015. The exit run rate is the recurring licence revenue released to the profit and loss account in the month of October.

Revenue from UK operations grew 25% to £6.9m (FY25: £5.5m), representing 72% of total revenues. Revenue from US operations grew to £2.7m (FY15: £0.6m), representing 28% of total revenues.

LOSS FROM OPERATIONS

Losses from operations were £5.3m after share-based payments of £362k and IPO costs of £502k, (FY15: loss: £0.7m), as the Group brought forward investments initially scheduled for 2017 to better meet the substantial market opportunity. Investments in growing our US sales, and wider sales & marketing teams were the core focus during the year.

Losses from operations were also impacted by the growth in total contracted revenue which resulted in increased sales commissions since the Group policy is to expense sales commissions on the whole contract immediately upon payment of the first invoice.

FOREIGN EXCHANGE GAINS

The entity generated foreign exchange gains during the period of £322k (FY2015:£13k).  The gains generated during the period have arisen as a result of the increased value of billings during the period in USD.  This increase in billings in USD has coincided with a steady fall in the value of the GBP against USD across the period, resulting in a significant movement in the exchange rate when a significant value of billings in USD remained outstanding on the 30-90 day credit terms offered. 

STATEMENT OF FINANCIAL POSITION

Deferred income, which is the value invoiced less the recognised revenue in the year, grew 206% to £10.4m (FY15: £3.4m), as a result of strong growth in new business and the prepayment of £2.2m from 2 customers. Of the £10.4m at 31 October 2016, £9.1m (87%) will be released in 2017 and the balance over the remaining period of the prepayment.

Trade and other receivables increased to £5.6m (FY15: £1.5m) as the Group enjoyed a strong end to the financial year. There are no intangibles on the balance sheet and research and development costs have been fully expensed as incurred as none of these met the criteria for capitalisation.

CASH FLOWS

Cash and cash equivalents at 31 October 2016 were £11.8m (31 October 2015: £2.4m). Net cash for the year increased as a result of £8.8m (net of expenses) raised at the IPO and advanced payments from customers of £2.2m. Strong contract trading term negotiations have enabled us to fund operating losses organically and bring forward investments from 2017 without the need to use any of the funds raised at the IPO. We continue to focus on being cash-generative in the medium term.

Additionally, the Group has a £2.0m Revolving Credit Facility which is currently unutilised.

Gary Johnson

Finance Director

 

 

Blue Prism Group PLC

 

Consolidated statement of profit or loss and other comprehensive income

for the year ended 31 October 2016

 

 

 

Note

2016

2015

 

 

£'000

£'000

 

 

 

 

Revenue

4

9,644

6,062

 

 

 

 

Cost of sales

5

(67)

(74)

 

 

_______

_______

 

 

 

 

Gross profit

 

9,577

5,988

 

 

 

 

Operating expense

 

(14,851)

(6,741)

 

 

 

 

Operating expenses before share based payments, IPO expenses and foreign exchange gains

6

(14,309)

(6,728)

Share-based payments

 

(362)

(26)

IPO expenses

 

(502)

-

Foreign exchange gains

 

322

13

 

 

_______

_______

 

 

 

 

Operating expenses

 

(14,851)

(6,741)

 

 

 

 

 

 

 

 

Operating loss

 

(5,274)

(753)

 

 

 

 

Interest received on bank deposits

 

25

10

 

 

_______

_______

 

 

 

 

Loss before tax

 

(5,249)

(743)

 

 

 

 

Tax expense

8

(69)

(53)

 

 

_______

_______

 

 

 

 

Loss and total comprehensive income for the year

 

(5,318)

(796)

 

 

_______

_______

 

 

 

 

Basic and diluted loss per share attributable to shareholders (p)

9

(10.53)

(2.56)

 

 

_______

_______

 

.

 

Blue Prism Group PLC

 

Consolidated statement of financial position

at 31 October 2016

 

 

 

Note

2016

2015

 

 

£'000

£'000

Non-current assets

 

 

 

Property, plant and equipment

10

158

43

Deferred tax assets

14

-

69

 

 

_______

_______

 

 

 

 

Total non-current assets

 

158

112

 

 

 

 

Current assets

 

 

 

Trade and other receivables

12

5,585

1,464

Cash and cash equivalents

21

11,788

2,351

 

 

_______

_______

 

 

 

 

Total current assets

 

17,373

3,815

 

 

_______

_______

 

 

 

 

Total assets

 

17,531

3,927

 

 

_______

_______

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

13

3,224

1,149

Deferred revenue

 

9,079

3,425

Corporation tax payable

 

-

2

 

 

_______

_______

 

 

 

 

Total current liabilities

 

12,303

4,576

 

 

 

 

Non-current liabilities

 

 

 

Deferred revenue

 

1,358

-

 

 

_______

_______

 

 

 

 

Total non-current liabilities

 

1,358

-

 

 

_______

_______

 

 

 

 

Total liabilities

 

13,661

4,576

 

 

_______

_______

 

 

 

 

Net assets/(liabilities)

 

3,870

(649)

 

 

_______

_______

Equity attributable to shareholders

 

 

 

Called up share capital

 

1,674

1,393

Share premium

 

9,194

356

Merger reserve

 

356

-

Share based payment reserve

 

287

104

Accumulated losses

 

(7,641)

(2,502)

 

 

_______

_______

 

 

 

 

 

 

3,870

(649)

 

 

_______

_______

 

The financial statements on pages    to    were approved and authorised for issue by the Board of Directors on 23 January 2017 and were signed on its behalf by:

 

 

G Johnson

Director

 

.

 

Blue Prism Group PLC

 

Consolidated statement of cash flows

for the year ended 31 October 2016

 

 

 

Note

2016

2015

 

 

£'000

£'000

Cash flows from operating activities

 

 

 

Loss for the year

 

(5,318)

(796)

Adjustments for:

 

 

 

Depreciation of property, plant and equipment

10

39

15

Finance income

 

(25)

(10)

Share-based payment expense

16

362

26

Income tax expense

8

69

53

 

 

_______

_______

 

 

 

 

 

 

(4,873)

(712)

 

 

 

 

Increase in trade and other receivables

 

(4,119)

(248)

Increase in trade and other payables

 

9,085

1,393

 

 

_______

_______

 

 

 

 

 

 

93

433

Cash generated from operations

 

 

 

Income taxes paid

 

(2)

(6)

 

 

_______

_______

 

 

 

 

Net cash flows from operating activities

 

91

427

 

 

 

 

Investing activities

 

 

 

Purchases of property, plant and equipment

10

(154)

(37)

Interest received

 

25

10

 

 

_______

_______

 

 

 

 

Net cash used in investing activities

 

(129)

(27)

 

 

 

 

Financing activities

 

 

 

Issue of ordinary shares net of issue costs

 

9,475

-

 

 

_______

_______

 

 

 

 

Net cash from financing activities

 

9,475

-

 

 

 

 

Net increase in cash and cash equivalents

 

9,437

400

Cash and cash equivalents at beginning of year

 

2,351

1,951

 

 

_______

_______

 

 

 

 

Cash and cash equivalents at end of year

21

11,788

2,351

 

 

_______

_______

 

.

 

Blue Prism Group PLC

 

Consolidated statement of changes in equity

for the year ended 31 October 2016

 

 

 

Share

capital

Share

premium

Share

based

 payment

reserve

Merger reserve

Accumulated

losses

Total

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

31 October 2014

1,393

356

78

-

(1,706)

121

Loss and total comprehensive income for the year

-

-

-

 

 

-

(796)

(796)

Share based payment

-

-

26

-

-

26

 

______

______

______

______

______

______

 

 

 

 

 

 

 

Loss and total comprehensive income for the year

-

-

-

-

(5,318)

(5,318)

Transfer on IPO

-

(356)

-

356

-

-

Exercise of options

153

5

-

-

-

158

Issue of shares at IPO

128

9,872

-

-

-

10,000

Share based payments

-

-

287

-

75

362

Cost of issuing new shares

-

(683)

-

-

-

(683)

Transfer on exercise/ forfeiture of options

-

-

(104)

-

104

-

 

______

______

______

______

______

______

Equity as at 31 October 2016

1,674

9,194

287

356

(7,641)

3,870

 

______

______

______

______

______

______

 

 

.

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016

 

 

The financial information for the year ended 31 October 2016 and the year ended 31 October 2015 does not constitute the company's statutory accounts for those years.

 

The company was incorporated on 2 September 2015 and, in consequence, the annual report for the year ended 31 October 2016 will be the first prepared by the company.  The statutory accounts for that year will be delivered to the Registrar of Companies following the Company's Annual General Meeting.   The auditors' reports on those accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

The financial information for the year ended 31 October 2015 is derived from that prepared by the company's subsidiary, Blue Prim Limited.  Blue Prim Limited has delivered abbreviated accounts for the year ended 31 October 2015 to the Registrar of Companies, which were prepared under UK GAAP and in accordance with the small companies' regime.   The auditors' reports on Blue Prim Limited statutory accounts for the year ended 31 October 2015 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

1

Accounting policies

 

Basis of preparation

 

The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below.  The policies have been consistently applied to all the years presented, unless otherwise stated.

 

The financial statements of the Group have been prepared on a going concern basis and in accordance with International Financial Reporting Standards ('IFRS') and their interpretations which have been issued by the International Accounting Standards Board ('IASB'), as adopted by the European Union. They have also been prepared with those parts of the 2006 Companies Act applicable to companies reporting under IFRS.

 

The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates.  It also requires Group management to exercise judgment in applying the Group's accounting policies.  The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 2.

 

Changes in accounting policies

 

a)  New standards, interpretations and amendments effective from 1 November 2015

 

There were no new standards or interpretations effective for the first time for periods beginning on or after 1 November 2015. None of the amendments to Standards that are effective from that date had a significant effect on the Group's financial statements.

 

b)  New standards, interpretations and amendments not yet effective

 

The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements which have been issued by the IASB but are not yet effective, may have a material impact on these financial statements:

 

IFRS 15 Revenues from Contracts with Customers, effective for periods commencing on or after I January 2018.  The directors have begun to assess the potential effects of this standard on the business, and in particular if it will have any impact on the way revenue is recognised.  A study will be carried out on this impact in 2017.

IFRS 9 Financial Instruments, effective for periods commencing on or after 1 July 2018.  The impact of this standard is being considered by the directors and any impact, especially around the value of debtors is yet to be fully investigated.

IFRS 16 Leases, effective for periods commencing on or after 1 January 2019.  The directors are assessing the impact of this standard and the possible impact of any leases being capitalised on the balance sheet.  A full review is yet to take place.

 

 

Basis of consolidation

 

The consolidated financial statements present the results of the company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

 

 

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

1

Accounting policies (continued)

 

Group reorganisation and IPO

 

During the year the Group was subject to restructuring prior to the IPO. Blue Prism Group plc was positioned at the top of the Group as the new parent company, with the former parent, Blue Prism Limited, becoming a wholly owned direct subsidiary of Blue Prism Group plc through a share-for-share exchange. Such group reorganisations are outside of IFRS3 as the Company does not meet the definition of a business and as such has been accounted for as a group reorganisation rather than a reverse acquisition.

 

The Group reconstruction has been accounted for using merger accounting principles. Therefore, the consolidated financial statements of Blue Prism Group plc are presented as if Blue Prism Group plc and Blue Prism Limited had always been part of the same Group. Accordingly, the results of Blue Prism Limited for the entire year ended 31 October 2016 are shown in the consolidated statement of comprehensive income and the comparative figures for the years ended 31 October 2015 are also prepared on this basis.

 

Transaction costs that relate directly to the issue of new equity instruments have been accounted for as a deduction from equity.  Where IPO transaction costs relate to both the listing of pre-existing and newly issued shares, those costs have been allocated proportionally between profit or loss and equity on the basis of the proportion of the new shares issued.

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

1

Accounting policies (continued)

 

Revenue recognition

 

The Group recognises revenue depending on the substance and legal form of the contracts with its customers. Revenue is recognised once a legally binding contract between the Group and its customers has been established and the delivery of the service has commenced. Service delivery is triggered by the providing of a 'software key' to the customer. Revenues are accrued or deferred based on the length of time through the contract, and this policy is consistently applied across all customers and contracts.

Provided the amount of revenue can be measured reliably and it is probable that the Group will receive consideration, revenue from the provision of a licence and follow up services is recognised from the commencement and over the period in which the services are rendered, as adjusted for the stage of completion of individual contracts.

Licence fee revenues and maintenance revenues are bundled together as the two revenue streams cannot be separated due to both being intertwined and maintenance is incurred throughout the licence term on an ongoing basis.  Revenue for these are recognised on an accruals basis; when invoiced in advance, the income is deferred in the statement of financial position and recognised in the income statement over the length of the licence and maintenance period.  The fee for maintenance is included in the licence fee due to the practicality of assessing the fair value of the maintenance portion.

 

Professional services revenues are recognised when the service has been delivered. If billed in advance, the income related to consultancy days not yet delivered at the end of the period is deferred and recognised in the income statement when the service takes place.

 

Training revenues are recognised when Blue Prism is notified that the online training course has been completed.

 

Sales commission

 

Sales commission is recognised in the profit and loss in wages and salaries at the point at which the contract is signed and the initial invoice has been collected.  This is recognised up front as opposed to deferring this cost over the period of the contract as it is deemed an introductory fee, and is not affected by the future performance of a contract.

 

Foreign currency

 

Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate (their "functional currency") are recorded at the rates ruling when the transactions occur.  Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date.  Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.

 

Trade receivables

 

Trade receivables are amounts due from customers for services provided in the ordinary course of business and are stated net of any provision for impairment. Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default, or significant delay in payment) that the Blue Prism Group will be unable to collect all of the amounts due. The amount of such a provision is the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

1

Accounting policies (continued)

 

Cash and cash equivalents

 

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less.

 

Financial assets

 

The only financial assets held by Blue Prism Group plc are trade receivables and other cash and cash equivalents.  Due to their short term nature, the carrying value of cash and cash equivalents, trade and other receivables approximate their fair value.

 

Financial liabilities

 

Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.

 

All financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through income statement.

 

Share capital

 

Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

 

The Group's ordinary shares are classified as equity instruments.

 

Defined contribution pension schemes

 

Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.

 

 

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

1

Accounting policies (continued)

 

Share-based payments

 

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period.  Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.  Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted.  As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied.  The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

 

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income over the remaining vesting period.

 

Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive income is charged with the fair value of goods and services received.

 

Leased assets

 

Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an "operating lease"), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight-line basis over the lease term.  The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.

 

Deferred taxation

 

Deferred tax is recognised in respect of relevant temporary differences that have originated but not reversed at the balance sheet date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. The deferred tax assets and liabilities are not discounted.

 

Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. 

 

Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. The principal annual rates used for this purpose are:-

 

Computer equipment   -   straight line over 3 years

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

1

Accounting policies (continued)

 

Research and development expenditure

 

Research expenditure is recognised as an expense when it is incurred.

 

Development expenditure is capitalised if, and only if, the Group can demonstrate all of the following:

 

(i)         the ability to measure reliably the expenditure attributable to the asset under development;

(ii)        the product or process is technically and commercially feasible; its future economic benefits are probable;

(iii)       the ability to use or sell the developed asset; and

(iv)       the availability of adequate technical, financial and other resources to complete the asset under development.

 

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment  losses, if any. Development expenditure that does not meet the criteria is expensed as incurred.

 

Capitalised development expenditure is amortised on a straight-line method when the services are ready for sale or use. In the event that it is no longer probable that the expected future economic benefits will be recovered, the development expenditure is written down to its recoverable amount.

 

 

2

Key accounting estimates and judgements

 

The Group makes certain estimates and assumptions regarding the future.  Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.  In the future, actual experience may differ from these estimates and assumptions.  The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

 

-     Revenue Recognition - Licence fee and maintenance revenue is recognised on an accruals basis; when invoiced in advance, the income is deferred in the statement of financial position and recognised in the income statement over the length of the licence.  The key judgements are that the two are bundled together due to the fact the two parts are intertwined and also due to the difficulty in being able to assess the fair value of maintenance over the licence period, with maintenance being incurred on an ongoing basis throughout the licence period.

 

 

-     Research and development costs - Internally generated technology is capitalised in accordance with IAS 38. Assumptions and judgements are made with regard to assessing the expected future economic benefits, the economic useful life and the level of completion of the databases. The key judgement here is defining the cut-off point between when research ending and development starting and an assessment is made when looking at the costs incurred and criteria for development costs, including the commercial and technical viability of the costs being assured. At the point where activities no longer relate to development but to maintenance, capitalisation is discontinued.

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

3

Financial instruments - Risk Management

 

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments.  This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them.  Further quantitative information in respect of these risks is presented throughout these financial statements.

 

There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

 

Capital risk management

 

The Group manages its capital to ensure that all Group entities will be able to continue on a going concern basis while maximising its long term return to shareholders. The capital structure of the Group consists of Company equity only, comprising issued capital, share premium, reserves and retained earnings. The Group is not exposed to any externally imposed capital requirements and has no borrowings.

 

Financial instruments by category

 

Financial Assets

 

 

2016

2015

 

£'000

£'000

 

 

 

Trade receivables

4,931

1,253

Cash and cash equivalents

11,788

2,351

 

______

______

 

 

 

Total Financial Assets

16,719

3,604

 

______

______

 

Financial Liabilities

 

 

2016

2015

 

£'000

£'000

 

 

 

Trade and other payables

1,193

683

Accruals

2,031

466

 

______

______

 

 

 

Total Financial Liabilities

3,224

1,149

 

______

______

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

3

Financial instruments - Risk Management (continued)

 

General objectives, policies and processes

 

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. 

 

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility.  Further details regarding these policies are set out below:

 

Credit risk

 

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales.  It is Group policy to assess the credit risk of new customers before entering contracts.

 

The Board has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered. The Group's review includes external ratings, when available.

 

Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted.

 

Further disclosures regarding trade and other receivables, which are neither past due nor impaired, are provided in note 12.

 

Cash at bank and short-term deposits

 

The Group's cash is held on deposit with the Group's principal bankers.   

 

Foreign exchange risk

 

Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency other than their functional currency.  The Group's policy is, where possible, to allow group entities to settle liabilities denominated in their functional currency) with the cash generated from their own operations in that currency.  Where group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere within the Group.

 

Liquidity risk

 

Liquidity risk arises from the Group's management of working capital.  It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

 

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due.  To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 90 days. 

 

The Board receives rolling 12-month cash flow projections on a monthly basis as well as information regarding cash balances.  At the end of the financial year, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances for at least 12 months from the date of signing these financial statements.

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

4

Segmental Analysis

 

The Group has one operating segment being the licensing of Robotic Process Automation (RPA) software used to automate routine, rules-based back office processes.

 

The Group operates in two main geographical areas: UK and USA. The Board of Directors only monitors revenue on this basis. Business performance is otherwise monitored by reference to total results against budget. Revenue for each of the geographical areas is as follows:

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Revenue from UK operations

6,946

5,479

 

Revenue from US operations

2,698

583

 

 

_______

_______

 

 

 

 

 

Total

9,644

6,062

 

 

_______

_______

 

Revenue

 

The Group currently has two key sources of revenue:

 

·     Licencing - for the provision of software licences, where the agreement is established of a legally binding contract between the Group and its customers. Standard maintenance and support services are included in the Licence fee.

·     Professional Services and training - where the customer requires consultancy or training on a project by project basis.

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Licences

8,304

4,605

 

Professional services and training

1,340

1,457

 

 

_______

_______

 

 

 

 

 

 

9,644

6,062

 

 

_______

_______

 

In the prior year the Group had three customers who each contributed to more than 10% of the Group's revenues being £1.2m, £0.9m, and £0.7m respectively. 

 

Assets, liabilities and sources of revenue are not analysed by geography as the business performance measure utilised by the chief operating decision maker, the Board of Directors, is the total business result

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

5

Cost of sales

 

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Recharged costs

67

74

 

 

_______

_______

 

 

6

Operating loss

 

 

 

 

 

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Operating loss is after charging/(crediting):

 

 

 

 

 

 

 

Fees payable to the companies auditor for the audit of the company's annual accounts

6

30

 

Fees payable to the company's auditor for other services:

 

 

 

Audit of the accounts of subsidiaries

36

-

 

Audit-related assurance services

19

5

 

Tax compliance services

4

6

 

Corporate finance services

140

-

 

Depreciation of property, plant and equipment

39

15

 

Staff costs (note 7)

10,549

4,159

 

Operating lease expense: Other

175

131

 

 

_______

_______

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

7

Staff costs

 

 

 

 

 

2016

2015

 

 

 

£'000

£'000

 

 

Staff costs (including directors emoluments) comprise:

 

 

 

 

 

 

 

 

 

Wages and salaries

8,708

3,611

 

 

Social security contributions and similar taxes

834

417

 

 

Share-based payment expense

362

26

 

 

Pension costs

96

105

 

 

Other staff costs

549

-

 

 

 

_______

_______

 

 

 

 

 

 

 

Total staff costs

10,549

4,159

 

 

 

_______

_______

 

Staff costs includes Sales commissions in the amount of £3,582k (2015: £865k).

 

Average monthly number of employees (including directors) during the period.

 

 

2016

2015

 

 

Number

Number

 

 

 

 

 

Directors*

5

8

 

 

 

 

 

Staff

 

 

 

Administration

4

1

 

Sales and marketing

29

13

 

Technical services

26

17

 

 

_______

_______

 

 

 

 

 

 

64

39

 

 

_______

_______

 

*For 2016 Directors denotes the average number of Blue Prism Group plc directors including 3 non- executive directors. In 2015 this was the number of Directors of Blue Prism Limited.

 

The remuneration of the highest paid director is shown in the Directors' Report.

 

Key management personnel compensation

 

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors of the company listed on page 11, and the Directors of Blue Prism Limited.

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Salary

809

650

 

Bonuses

105

124

 

Commission

202

141

 

Pension contributions

40

36

 

Employers NI contributions

133

115

 

Car allowances

38

40

 

 

_______

_______

 

 

 

 

 

 

1,327

1,106

 

 

_______

_______

 

The fair value of the share options issued to the key management personnel is £552,256, with one third charged to the profit and loss each year. The profit and loss charge for the year ended 31 October is £114,990.

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

8

Tax expense

 

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

 

 

 

 

Current tax expense

 

 

 

Current tax on loss for the year

-

2

 

Foreign tax on loss for the year

-

3

 

 

_______

_______

 

 

 

 

 

Total current tax

-

5

 

 

 

 

 

Deferred tax expense

 

 

 

Current period tax expense

-

80

 

Release of deferred tax assets in respect of prior periods

69

(32)

 

 

_______

_______

 

 

 

 

 

Total deferred tax

69

48

 

 

_______

_______

 

 

 

 

 

Total tax expense

69

53

 

 

_______

_______

 

 

 

 

 

No deferred tax asset has been recognised in the year ended 31 October 2016 in relation  to trading losses available due to the uncertainty of their utilisation in the near future (2015:£53k).

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

8

Tax expense (continued)

 

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Loss before tax

5,249

(743)

 

 

 

 

 

Tax at domestic rate (2016:20%, 2015:20%)

(1,050)

(148)

 

 

______

______

 

Effects of:

 

 

 

 

 

 

 

Expenses not deductible for tax purposes

318

2

 

Tax on share options exercised in the period

-

-

 

Differences on foreign tax rates

-

(226)

 

Share options exercised in the period

(1,856)

-

 

Deferred tax not recognised

2,593

425

 

Adjust deferred tax to average rate

(5)

-

 

Deferred tax asset released during the period

69

-

 

 

_______

_______

 

 

 

 

 

Total tax expense

69

53

 

 

_______

_______

 

   The Blue Prism Group has tax losses of approximately £16,945k (31 October 2015: £2,653k) to carry forward against future profits. The tax value of such losses amounted to £3,756k (31 October 2015: £777k). The UK tax losses have no expiry date. US tax losses expire after 20 years if not utilised.

 

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. On the basis there is insufficient evidence that future taxable profits will be available to utilise the tax losses, the deferred tax asset (Note 14) has been released during the period, and no deferred tax asset has been recognised in respect of the trading losses carried forward.

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

9

Basic and diluted loss per share

 

 

 

 

 

 

 

2016

2015

 

Numerator

£'000

£'000

 

 

 

 

 

Loss for the year and earnings used in basic EPS

(5,318)

(796)

 

 

 

 

 

 

 

 

 

Denominator

'000

'000

 

 

 

 

 

Weighted average number of shares used in basic EPS

50,487

31,093

 

 

_______

_______

 

 

 

 

 

Weighted losses per share (pence)

(10.53)

(2.56)

 

 

_______

_______

 

 

 

 

 

Denominator

'000

'000

 

 

 

 

 

Potential diluted average number of shares

59,432

31,093

 

 

 

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

10

Property, plant and equipment

 

 

 

Plant,

 

 

machinery

 

 

£'000

 

Cost

 

 

 

 

 

At 1 November 2014

98

 

Additions

37

 

 

_______

 

 

 

 

At 31 October 2015

135

 

 

_______

 

 

 

 

At 1 November 2015

135

 

Additions

154

 

 

_______

 

 

 

 

At 31 October 2016

289

 

 

_______

 

 

 

 

Accumulated depreciation and impairment

£'000

 

 

 

 

At 1 November 2014

77

 

Depreciation

15

 

 

_______

 

 

 

 

At 31 October 2015

92

 

 

_______

 

 

 

 

At 1 November 2015

92

 

Depreciation

39

 

 

_______

 

 

 

 

At 31 October 2016

131

 

 

_______

 

 

 

 

Net book value

 

 

At 1 November 2014

21

 

 

_______

 

 

 

 

At 31 October 2015

43

 

 

_______

 

 

 

 

At 31 October 2016

158

 

 

_______

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

11

Subsidiaries

 

The principal subsidiaries of Blue Prism Group plc, all of which have been included in these consolidated financial statements, are as follows:

 

 

 

Country of

 

 

 

incorporation

 

 

 

and principal

Proportion of ownership

 

Name

place of business

interest at 31 October

 

 

 

2016

2015

 

 

 

 

 

 

 

 

 

 

 

Blue Prism Limited

United Kingdom

100%

100%

 

Blue Prism Software Inc*

United States

100%

100%

 

        *Indirectly held through Blue Prism Limited.

 

 

12

Trade and other receivables

 

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Trade receivables

5,251

1,488

 

Less: provision for impairment of trade receivables

(320)

(235)

 

 

_______

_______

 

 

 

 

 

Trade receivables - net

4,931

1,253

 

Prepayments

654

198

 

Other receivables

-

13

 

 

_______

_______

 

 

 

 

 

Total trade and other receivables

5,585

1,464

 

 

_______

_______

 

The increase in the provision for impairment is due to the foreign exchange movement on the trade receivable valuation only.

 

As at 31 October 2016 trade receivables of £1,795k (2015 - £280k) were past due but not impaired. They relate to customers with no default history. The ageing analysis of these receivables is as follows:

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Current

3,136

973

 

Up to 30 days overdue

601

146

 

30 to 60 days overdue

300

71

 

90 days or more and overdue

894

63

 

 

_______

_______

 

 

 

 

 

 

4,931

1,253

 

 

_______

_______

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

13

Trade and other payables

 

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Trade payables

574

188

 

Other payables

619

495

 

Accruals

2,031

466

 

 

_______

_______

 

 

 

 

 

Total trade and other payables

3,224

1,149

 

 

_______

_______

 

 

14

Deferred tax assets

 

The movement on the deferred tax account is as shown below:

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

At 1 November

 

 

 

 

69

117

 

Deferred tax credit on share options exercised

(21)

5

 

Deferred tax in respect of trading losses

36

(49)

 

Capital allowances in excess of depreciation

(15)

(4)

 

Deferred tax asset released during the period

(69)

-

 

 

_______

_______

 

 

 

 

 

At 31 October

-

69

 

 

_______

_______

 

 

The deferred tax balances relate to temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial information as summarised below.

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Deferred tax credit on share options in issue

-

21

 

Deferred tax in respect of trading losses

-

55

 

Capital allowances in excess of depreciation

-

(7)

 

 

_______

_______

 

 

 

 

 

 

-

69

 

 

_______

_______

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

15

Share capital

 

 

 

 

 

2016

2015

 

Allotted and fully paid up

 

 

£'000

£'000

 

 

 

 

 

 

 

Ordinary share capital

 

 

622

310

 

Class B preference shares

 

 

-

307

 

8% redeemable preference shares

 

 

-

776

 

Deferred shares

 

 

1,052

-

 

 

 

 

_________

_________

 

 

 

 

 

 

 

Total

 

 

1,674

1,393

 

 

 

 

_________

_________

 

 

 

Issued and fully paid

 

 

 

 

 

Share capital

Share

 premium

 

 

 

Number

£'000

£'000

 

 

 

 

 

 

 

At 31 October 2014

 

310,162

310

356

 

Issues of new shares for cash during the year

 

440

1

-

 

 

 

_________

_________

_________

 

 

 

 

 

 

 

At 31 October 2015

 

310,602

311

356

 

 

 

_________

_________

_________

 

 

 

 

 

 

 

Issue of new shares prior to IPO

 

1,000

1

-

 

Issue of shares immediately prior to IPO

(exercise of all options vested)

 

152,355

152

5

 

 

 

_________

_________

_________

 

 

 

 

 

 

 

Total ordinary shares prior to IPO

 

463,957

464

361

 

Upon IPO:

Share split: 100 ordinary shares for every £1.00 ordinary share

 

46,395,700

464

361

 

Transfer on IPO

 

-

-

(356)

 

Ordinary £0.01 shares issued for preference and

B preference shares

 

2,994,755

30

-

 

New ordinary £0.01 shares issued at IPO

 

12,820,513

128

9,872

 

Cost of issuing new ordinary shares

 

-

-

(683)

 

 

 

_________

_________

_________

 

 

 

 

 

 

 

Total ordinary shares at 31 October 2016

 

62,210,968

622

9,194

 

 

 

_________

_________

_________

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

15

Share capital (continued)

 

 

Ordinary shares are classed as Equity

 

As part of the group restructure, the preference shares of £1.00 each and the B preference shares of £1.00 held by shareholders were converted into Ordinary Shares and deferred shares of £0.01.  The conversion resulted in those shares converting into 2,994,755 Ordinary Shares and 105,269,845 deferred shares of £0.01 as follows:

 

 

Number of

deferred

 shares

 

Nominal

 value

 

 

 

 

 

Deferred shares

105,269,845

1,052,698

 

The deferred shares carry no voting rights, no rights to income and the right to a return of a maximum of £0.001 on a winding up of the Company.

 

16

Share options

 

The Company introduced a Share Option Plan (SOP) in August 2008, whereby the Board of Directors is entitled to grant options to staff, which are convertible into ordinary shares. Options have been granted with a fixed exercise price of £1.00 and £1.25. The contractual life of an option is 10 years. All staff are eligible for awards under the current SOP. There are no reload features. The company has made annual grants each year since 21 September 2008. Options granted under the SOP vest over a three-year period, one third of the options per annum from the date of grant. Exercise of an option is subject to continued employment and SOP members may not transfer or sell their shares except as permitted or required to do under articles subject to the Articles of Association of the Company.  Options were valued using the Black-Scholes option-pricing model. There are no performance conditions.

 

All the above options were exercised immediately prior to the IPO as follows:

 

 

Number of share options exercised

 

152,355

 

Cash raised by the exercise for prices between £1.00 and £1.25:

 

£158,319

 

Weighted average exercise price

 

£1.039

 

In February 2016 the Company established an Employee Share Plan and a Non-Employee Share Plan (together the "Share Plans"). The Employee Share Plan is administered by the remuneration committee of the Board and the Non-Employee Share Plan is administered by the Board. Awards under the Share Plans take the form of options to acquire Ordinary Shares with an exercise price equal to the market value of an Ordinary Share on the date of grant. All employees of the Group may be granted awards under the Employee Share Plan. Non-Executive directors and consultants of the Group may be granted awards under the Non-Employee Share Plan. All options under the Share Plans are ten year options. The Employee Share Plan options for staff vest over a three year period, one third each year. Directors options under the Employee Share Plan vest at the end of the three year period. Options awarded under the Non-Employee Share Plan vest over three years, one third each year.

 

Under these Share Plans, 4,861,859 share options were issued to directors, staff and non-employees at the IPO price of £0.78. Under the Black-Scholes option-pricing model the cost of these options was £500,244 in the first year. Of this £312,481 has been charged to the profit and loss this year.

 

During the year a further 574,994 share options have been granted. The cost of these options in the first year under the Black-Scholes option-pricing model was £232,079. Of this £49,600 has been charged to the profit and loss this year.

 

The exercise price of options outstanding at 31 October 2016 ranged between 78p and 308.5p. 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

16

Share options (continued)

 

Share options movement since IPO.

 

 

Number of options

Weighted average

option price (£)

 

 

 

Share options on £1 ord shs outstanding at 1 November 2015

154,155

1.03

Share Options on £1 ord. shs exercised on 21/12/15

(1,000)

1.00

£1 Ordinary share options cancelled on 01/12/15

(800)

1.25

Share options on £1 ordinary shares exercised on IPO

(152,355)

1.03

 

________

 

 

 

 

Balance of share options outstanding at IPO

Nil

 

 

________

 

 

 

 

Share options on 1p ord shs granted at IPO on 18/3/16

4,861,859

0.78

Share options on 1p ord shs  granted on 9/8/16

567,947

2.236

Share options on 1p ord shs granted on 5/10/16

25,352

3.085

Share options on 1p ord shs granted on 27/10.16

24,430

3.07

 

________

 

 

 

 

Total granted in the period

5,479,588

 

 

 

 

Share options forfeited in the period

(42,735)

0.78

 

             ________

 

 

 

 

Share options outstanding at 31 October

5,436,853

 

 

_______

 

 

A share split of 100 1p shares for every £1 ordinary share was implemented immediately before the IPO on 18th March 2016.

 

Of the 5,436,853 share options outstanding at 31 October 2016, none had vested and were exercisable.

 

Fair Value

The fair value of share options issued in the year has been measured using the Black-Scholes model. In the absence of historic volatility data, expected volatility has been estimated using the volatility of comparable companies.

 

Grant Date

18/3/2016

9/8/2016

5/10/2016

27/10/2016

 

 

 

 

 

Share price at date of grant (£)

0.78

2.27

3.085

3.07

Exercise price (£)

0.78

2.27-2.215

3.085

3.07

Weighted average exercise price

0.78

2.236

3.085

3.07

Shares under option

4,861,859

567,948

25,352

24,430

Risk-free rate

0.85%

0.14%

0.29%

0.65%

Time to expiration (years)

5

5

5

5

Expected volatility

30%

30%

30%

30%

Dividend yield

0%

0%

0%

0%

Fair value per option (£)

0.22

0.60-0.62

0.83

0.84

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

17

Reserves

 

The following describes the nature and purpose of each reserve within equity:

 

 

Reserves

Description and purpose

 

 

 

 

Share premium

Amount subscribed for share capital in excess of nominal value.

 

 

 

 

Share based payment reserve

The share based payment reserve represents equity settled share based employee remuneration until such share options are exercised.

 

Merger reserve

Amounts arising on share for share exchange.

 

 

 

 

Retained earnings

All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.

 

 

 

 

 

18

Leases

 

Operating leases - lessee

 

The Group maintains a number of short-leased properties.

 

The total future value of minimum lease payments is due as follows:

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Not later than one year

209

21

 

Later than one year and not later than five years

117

-

 

 

_______

_______

 

 

 

 

 

 

326

21

 

 

_______

_______

 

 

19

Related party transactions

 

The key management compensation is disclosed in note 7.

 

There were no other related party transactions.

 

 

 

Blue Prism Group PLC

 

Notes forming part of the financial statements

for the year ended 31 October 2016 (continued)

 

 

20

Post balance sheet event

 

Throughout the periods presented, the functional currency of Blue Prism Software Inc, a wholly owned subsidiary within the Blue Prism group, has been determined to be GBP.  This is on the basis of the significant Sterling denominated expenses it incurs and the historically low sales achieved in this development stage subsidiary.  During the year, sales volumes have increased and expenses have become increasingly US Dollar denominated.  In consequence, with effective 1 November 2016, the Board has made the decision to change the functional currency to US Dollars.

 

 

21

Notes supporting statement of cash flows

 

  Cash and cash equivalents for purposes of the statement of cash flows comprises:

 

 

 

2016

2015

 

 

£'000

£'000

 

 

 

 

 

Cash at bank available on demand

2,772

2,351

 

Short-term deposits

9,016

-

 

 

_______

_______

 

 

 

 

 

 

11,788

2,351

 

 

_______

_______

 

Blue Prism Group PLC

 

Notes to the Company financial statements at 31 October 2016

Five year record

 

 

 

2016

2015

2014

2013

2012

 

 

 

 

 

 

 

IFRSs

IFRSs

IFRSs

UK GAAP

UK GAAP

 

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

Revenue

9,644

6,062

4,488

2,949

2,532

 

 

 

 

 

 

(Loss)/profit from operations

(5,274)

(753)

(233)

(258)

155

 

 

 

 

 

 

(Loss)/profit before tax

(5,249)

(743)

(225)

(251)

164

 

 

 

 

 

 

(Loss)/profit after tax

(5,318)

(796)

(122)

(247)

162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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