Source - RNS
RNS Number : 3667K
ServicePower Technologies PLC
21 September 2016
 

21 September 2016

 

ServicePower Technologies plc

("ServicePower" or the "Company")

 

Interim Results

 

ServicePower Technologies Plc (AIM: SVR), a market leader in workforce management software, announces its unaudited interim results for the six months ended 30 June 2016.

 

Financial Highlights

 

Trading for the half-year is in line with management expectations

 

·     Total revenues of £6.4 million (H1 2015: £6.9 million)

Recurring revenues accounted for 98%

Product revenues comprising 66%

·     Gross profit of £3.3 million (H1 2015: £3.4 million)

·     Loss before tax of £0.7 million (H1 2015: £0.6 million)

·     Cash balance at 30 June 2016 was £0.7 million (30 June 2015 Cash balance: £0.7 million)

The Company anticipates a significant improvement in the Company's cash position in H2 2016 with increased revenue trends and support contract renewals

 

Operational Highlights 

·     Following the momentum gained in 2015, 11 deals were signed during the period with new and existing customers, with a strong pipeline in place for H2 2016 and 2017

·     The Company entered into a number of strategic partnerships in order to broaden its functional capabilities and cloud-based offerings, sales and implementation capacity

·     Continued investment in product innovation

·     The management remains confident in the strategy and outlook for the business

 

Post Period end

·     Positive EBITDA and net income achieved in June, July and August 2016 with the increase in revenue and cost efficiencies

·     Signing of contracts worth more than £1 million of annual revenue

·     Multiple new customers and products went live

 

 

Marne Martin, CEO of ServicePower plc, commented: "ServicePower continues to execute on its strategy of innovation and development, and I am pleased with the positive momentum achieved in the period. Trading is once again in line with management expectations, on the back of a number of new deals signed in the first half of the year. We have a strong pipeline of opportunities ahead of us and I look forward to announcing further success in the second half. 

 

 

For further information, please contact:

 

ServicePower Technologies Plc

FinnCap

Newgate 

Tel: 0161 476 7762

Tel: 0207 220 0500

Tel: 020 7653 9850

Marne Martin, CEO

Simon Evans, CFO

Jonny Franklin-Adams

Emily Watts

Kate Bannatyne

Adam Lloyd

Helena Bogle

 

 

 

 

About ServicePower

 

ServicePower, the acknowledged leader in Optimization Technology, provides an innovative global, mobile workforce management software platform used by field service organizations to maximize productivity and efficiency, intelligently schedule appointments, SLA and complex jobs, as well as parts.  Our platform focuses on solving the fundamental problems organisations with mobile workers face with patented routing optimization, M2M connected services, contractor and warranty management, cutting edge enterprise mobile and business management technology, robust business intelligence and asset tracking.

 

ServicePower is listed on the AIM market of the London Stock Exchange with the ticker SVR.L. For more information please visit http://www.servicepower.com/ 



 

Joint statement of the Chairman and Chief Executive   

 

 

H1 2016 Overview

 

The Board is pleased to report solid progress during the period as the Company continues to  expand its client base, invest in product innovation and build its brand awareness. Gross margins have seen an improvement to 51.7% (H1 2015: 49.0%), especially in the latter portion of the period, setting the basis for the positive EBITDA and profit before tax seen in June. The latest contracts improve our SaaS deployment metrics to more than two-thirds of the entire client base, demonstrating continued focus on moving more fully to a SaaS based business model.

 

The company has provided new functionality, user interfaces and product development across the entire product suite platform.  Innovations over the last year have also enabled the company to look at expanding its reach further into optimized rosters, optimizing non-field service verticals, and expanding plant maintenance optimization also using the latest in quantum annealing and other new algorithms being developed.

 

ServicePower's continues to add partners who add complementary features or functionality, or to those who can open sales channels, in terms of verticals or geographies. In H1 2016, ServicePower improved its sales pipeline and execution abilities through signing strategic partnerships with Westbrook and Bolt Data. We are pleased to report that post period end, a number of new customers also went live.  Renewal and retention rates remain very high and new pipeline opportunities generated in late 2015 and 2016 are maturing. 

:

ServicePower is recognized by the industry and our clients as a leading innovator of mobile workforce management technology. During the period, ServicePower was pleased to be awarded a variety of prestigious new awards.  See www.servicepower.com for more details.  

 

Operational Review

 

The Company has reported a solid first half on the back of new partnerships with a number of large enterprises.

 

Further execution is expected in the second half of the year as a continued pipeline of activities gains momentum ahead of end of year budgeting. Product innovations also continue at a weekly release schedule, both delivering roadmap as well as client requested features, including new credentialing integration, self-service configurability, integration to NEXUS FStm infrastructure improvements, customer portal improvements and the next versions of Optimization on DemandTM.

 

 

Financial Review

 

Total revenue in the half was £6.4 million (H1 2015: £6.9 million), of which 98% is recurring. Within this, ServiceOperations revenue was £3.6 million (H1 2015: £3.2 million), the difference being some timing in recognition of revenue, whilst ServiceScheduling revenue was £2.8 million (H1 2015: £3.8 million) reflecting some revenue recognition impact of migrating from license to SaaS as well as some postponements occurring in some of the larger global rollout timetables due to customer delays. 

 

Total cost of sales in the six months was £3.1 million down 11% and in line with revenue reduction (H1 2015: £3.5 million).

 

A breakdown of revenue as reported from the ServiceScheduling segment is as follows:

 


H1 2016

H1 2015


£ million

£ million

Licences

0.3

0.6

Implementation/support

2.3

3.1

Mobility

0.2

0.1

Total

2.8

3.8

 

A breakdown of revenue as reported from the ServiceOperations segment is as follows:

 


H1 2016

H1 2015


£ million

£ million

Licences

0.5

0.4

Implementation/support

0.3

0.1

Hosting

0.1

0.7

Operations US

1.4

0.7

Operations UK

1.3

1.3

Total

3.6

3.2

 

 

The Company continued to invest across its product range, investing further in infrastructure, support, and other related functions, expensed R&D of £0.4 million in H1 2016 (H1 2015: £0.8 million).

 

Gross profit for the period was £3.3 million (H1 2014: £3.4 million). The Company generated an operating loss of £0.7 million (H1 2015: £0.5 million), given the timing of revenue recognition and incurring some redundancy and other IT cloud transition costs during the period. ServicePower made a loss before tax of £0.7 million (H1 2015: £0.6m).

 

The basic and diluted loss per share for the half year was 0.31p (H1 2015: loss per share of 0.27p).

 

Cash balances were £0.7 million at 30 June 2016 compared to the cash balances at 30 June 2015 of £0.7 million, and £1.4 million at 31 December 2015. The difference in cash from year end 2015 to mid-year 2016 is primarily due to the timing of accounts receivable and accounts payable balances. The Company anticipates significant improvement in the Company's cash position in H2 2016, through increased revenue, cash collection and the timing of support renewals.

 

The Directors do not recommend the payment of a dividend at this time (2015: nil).

 

Outlook

 

In line with our strategy, this year has seen further investment in product innovation and development and the Board is pleased with the positive momentum achieved in the period. Trading is in line with management expectations, on the back of a number of new deals signed in the first half of the year. We have a strong pipeline of opportunities ahead of us and we look forward to announcing further success in the second half. 

 

 

 

 

Hugh Fitzwilliam-Lay, Chairman                 Marne Martin, CEO                          

21 September 2016

 



 

ServicePower Technologies plc

Condensed consolidated income statement for the six months ended 30 June 2016

 








Unaudited

Unaudited

Audited



6 months to

6 months to

12 months to



30 June

30 June

31 December



2016

2015

2015


Note

£'000

£'000

£'000






Revenue - Service Scheduling

3

2,780

3,750

7,026

                 - Service Operations

3

3,588

3,192

5,964

Total revenue


6,368

6,942

12,990






Cost of sales


(3,076)

(3,537)

(6,878)






Gross profit


3,292

3,405

6,112






Administrative expenses  - other expenses


(4,083)

(3,941)

(7,268)

  - foreign exchange gain


119

7

71

Total Administration Expenses


(3,964)

(3,934)

(7,197)

Total loss from operations


(672)

(529)

(1,085)






Investment revenue


1

-

2

Finance costs


(44)

(87)

(119)






Loss before taxation     


(715)

(616)

(1,202)

R&D Tax Credit





Taxation

4

-

-

95











Loss after Tax for the period/year attributable to the





owners of the company


(715)

(616)

(1,107)








Pence

Pence

Pence

Loss per share  





Basic

5

(0.31)p

(0.27)p

(0.5)p

Diluted

5

(0.31)p

(0.27)p

(0.5)p






 

All amounts relate to continuing activities.



ServicePower Technologies plc

Condensed consolidated statement of comprehensive income for the six months ended 30 June 2016

 



Unaudited

Unaudited

Audited



30 June

30 June

31 December



2016

2015

2015



£'000

£'000

£'000






Loss for the period/year


(715)

(616)

(1,107)

Exchange differences on translation of foreign





operations


52

(131)

68

Other comprehensive income/(expense) for the period/year


52

(131)

68

Total comprehensive expense for the





for the period/year


(663)

(747)

(1,039)

 



ServicePower Technologies plc

Condensed consolidated statement of changes in equity for the six months ended 30 June 2016


Equity attributable to equity holders of the Company

 











Share capital

Share premium account

Capital redemption reserve

Share scheme reserve

Exchange translation reserve

Equity reserve

Merger reserve

Retained reserves

Total

 


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

Balance at 1 January 2016










 

(audited)

2,275

19,661

8,034

716

(1,410)

401

(3,008)

(24,317)

2,352

 

Loss for the period

-

-

-

-

-

-

-

(715)

(715)

 

Other comprehensive income










 

for the period

-

-

-

-

52

-

-

-

52

 

Total comprehensive income










 

/(expense) for the period

-

-

-

-

52

-

-

(715)

(663)

 

Share-based payments




30





30

 

Balance at 30 June 2016










 

(unaudited)

2,275

19,661

8,034

746

(1,358)

401

(3,008)

(25,032)

1,719

 

 











 

Balance at 1 January 2015










 

(audited)

10,032

18,994

-

1,041

(1,478)

401

(3,008)

(23,564)

2,418

 

Loss for the period

-

-

-

-

-

-

-

(616)

(616)

 

Other comprehensive income










 

for the period

-

-

-

-

(131)

-

-

-

(131)

 

Total comprehensive income










 

/(expense) for the period

-

-

-

-

(131)

-

-

(616)

(747)

 

Share-based payments

-

-

-

30

-

-

-

-

30

 

Share capital adjustment

2

-

-

-

-

-

-

-

2

 

Shares issued in the year

275

774

-

-

-

-

-

-

1,049

 

Balance at 30 June 2015










 

(unaudited)

10,309

19,768

-

1,071

(1,609)

401

(3,008)

(24,180)

2,752

 











 

Balance at 1 January 2015










 

(audited)

10,032

18,994

-

1,041

(1,478)

401

(3,008)

(23,564)

2,418

 

Loss for the year

-

-

-

-

-

-

-

(1,107)

(1,107)

 

Other comprehensive income for the year

-

-

-

-

68

-

-

-

68

 

Total comprehensive income/(expense)

-

-

-

-

68

-

-

(1,107)

(1,039)

 

Shares issued in the year

277

677

-

-

-

-

-

-

944

 

Transfer to capital redemption reserve

(8,034)

-

8,034

-

-

-

-

-

-

 

Transfer to retained earnings

-

-

-

(354)

-

-

-

354

-

 

Credit to equity-settled share-based payments

-

-

-

29

-

-

-

-

29

 

Balance at 31 December 2015










 

(audited)

2,275

19,661

8,034

716

(1,410)

401

(3,008)

(24,317)

2,352

 











 

 



ServicePower Technologies plc

Condensed consolidated balance sheet at 30 June 2016

 



Unaudited

Unaudited

Audited



30 June

30 June

31 December



2016

2015

2015

Assets


£'000

£'000

£'000

Non-current assets





Intangible assets 


2,549

2,024

2,323

Property, plant and equipment


201

265

237



2,750

2,289

2,560

Current assets





Trade and other receivables


2,564

3,191

2,179

Current tax receivable


97

-

193

Cash and cash equivalents


692

660

1,417



3,353

3,851

3,789

Total assets


6,103

6,140

6,349






Current liabilities





Trade and other payables


(1,252)

(1,594)

(1,420)

Deferred revenue


(1,719)

(1,790)

(2,225)

Other creditors


(17)

(4)

(6)

Short term loan


(1,396)

-

(346)



(4,384)

(3,388)

(3,997)

Net assets


  1,719

2,752

2,352






Equity





Share capital


2,275

10,309

2,275

Capital redemption reserve


8,034

-

8,034

Share premium account


19,661

19,768

19,661

Share scheme reserve


746

1,071

716

Exchange translation reserve


(1,358)

(1,609)

(1,410)

Equity reserve


401

401

401

Merger reserve


(3,008)

(3,008)

(3,008)

Retained earnings deficit


(25,032)

(24,180)

(24,317)

Total equity


1,719

2,752

2,352

 

 

 

The half-yearly report was approved by the Board of Directors and authorised for issue on 30 September 2016 and was signed on its behalf by:

 

 

 

M Martin

Director



ServicePower Technologies plc

Condensed consolidated cash flow statement for the six months ended 30 June 2016

 


Note

Unaudited

Unaudited

Audited



6 months to

6 months to

12 months to



30 June

30 June

31 December



2016

2015

2015



£'000

£'000

£'000






Net cash outflow from





operating activities

6

(1,494)

(1,571)

(588)






Investing activities





Interest received


1

-

2

Interest paid


-

-

(31)

Purchases of property, plant and equipment


(15)

(78)

(117)

Expenditure on intangible assets


(299)

(168)

(735)

Net cash used in investing activities


(313)

(246)

(881)






Financing activities





Loan note redemption


-

(1,156)

(1,280)

Issue of ordinary shares


-

1,049

1,067

Short term loan


1,000

-

750

Repayment of short term loan


-

-

(750)

Cash received from short term factoring


19

-

346

Net cash generated/(used) in financing activities


1,019

(107)

133






Net decrease in cash and cash equivalents


(788)

(1,924)

(1,336)






Cash and cash equivalents at beginning of





period/year


1,417

2,702

2,702






Effect of exchange rate changes


63

(118)

51






Cash and cash equivalents at end of period/year


692

660

1,417








 

 



ServicePower Technologies plc

Notes to the condensed set of financial statements for the six months ended 30 June 2016

 

1.             General information

 

The half-yearly report has been prepared on the basis of the accounting policies set out in the Group's financial statements for the year ended 31 December 2015. The annual figures set out in this document do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. A copy of the 2015 statutory accounts has been delivered to the Registrar of Companies. The report was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006, or include a reference to any matter to which the auditors drew attention by way of emphasis of matter without qualifying their report.

 

 The half-yearly report has not been audited or reviewed by the Company's auditor pursuant to the Auditing Practices Board guidance on "Review of Interim Financial Information."

 

2.             Accounting policies

 

The condensed set of financial statements has been prepared using policies consistent with IFRS as adopted by the European Union. The same accounting policies and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 31 December 2015 and published by the Group in 2016. While the financial figures in the half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.

 

The Group recognises that a significant portion of cash receipts comes from the sale of large software licences. The signing of contracts by large corporate customers can be difficult to predict due to long procurement cycles and therefore there is uncertainty in forecasting the timing and quantum of cash receipts from these customers.

 

During the period, the Group has continued its Service Operations business, which provides a regular revenue stream and cash funding to the Group and the Group continues to monitor costs closely in order to conserve cash.

 

At 30 June 2016 the Group had net assets of £1,719,000 including £692,000 of cash and cash equivalents (31 December 2015 - net assets of £2,353,000 including £1,417,000 of cash and cash equivalents and 30 June 2015 - net assets of £2,752,000 including £660,000 of cash and cash equivalents).

 



ServicePower Technologies plc

Notes to the condensed set of financial statements for the six months ended 30 June 2016

 

2.                Accounting policies (continued)

 

Going concern (continued)

 

Based on cash flow forecasts which take into account current sales orders and expected conversion of opportunities, expenditure forecasts and the Group's current cash balance, the directors consider it appropriate to prepare the Group's half-yearly report on the going concern basis.

 

3.                Business segments

 

Segment information reported externally is analysed on the basis of the Group's business streams, namely Service Scheduling, which provides scheduling solutions and Service Operations, which provides claims and despatch processing in the consumer electronics market. This method of segment analysis is also used to report to the Board and the Chief Executive.

 

Segment information about these businesses is presented below:

 

Unaudited six months ended

Service

Service

Group

30 June 2016

Scheduling

Operations

Total


2016

2016

2016


£'000

£'000

£'000





Revenue from external sales

3,306

3,062

6,368

Segment profit

1,709

1,583

3,292

Central administration costs - other



(4,083)

Foreign exchange loss



119

Total central administration costs



(3,964)





Investment income



1

Finance costs



(44)

Loss before tax



(715)

Taxation



-

Loss after tax



(715)

 

 

 

 

 

 

 

 

 

 



 

 

ServicePower Technologies plc

Notes to the condensed set of financial statements for the six months ended 30 June 2016

 

3.            Business segments (continued)

 

 

 

Unaudited six months ended

Service

Service

Group

30 June 2015

Scheduling

Operations

Total


2015

2015

2015


£'000

£'000

£'000





Revenue from external sales

2,780

3,588

6,942

Segment profit

1,751

1,654

3,405

Central administration costs - other



(3,941)

Foreign exchange gain



7

Total central administration costs



(3,512)





Investment income



-

Finance costs



(87)

Loss before tax



(616)

Taxation



-

Loss after tax



(616)





                                                                               

Audited twelve months ended




31 December 2015

Service

Service

Group


Scheduling

Operations

Total


2015

2015

2015


£'000

£'000

£'000





Revenue from external sales

7,026

5,964

12,990

Segment profit

3,306

2,806

6,112

Central administration costs - other



(7,268)

Foreign exchange gain



71

Total central administration costs



(7,197)





Investment income



2

Finance costs



(119)

Loss before tax



(1,202)

Taxation



95

Profit after tax



(1,107)

 



 

ServicePower Technologies plc

Notes to the condensed set of financial statements for the six months ended 30 June 2016

 

3.            Business segments (continued)

 

Segment assets


Unaudited

Unaudited

Audited


at 30 June

at 30 June

at 31 December


2016

2015

2015


£'000

£'000

£'000





Service Scheduling

2,133

1,815

1,890

Service Operations

1,134

966

1,005





Total segment assets

3,267

2,781

2,895

Unallocated assets

2,836

3,359

3,454

Total consolidated assets

6,103

6,140

6,349

 

4.            Taxation on loss from ordinary activities

 

No tax charge arises in the current period due to the tax losses available. A tax charge of £nil arose in the period ended 30 June 2016 and nil was payable at 31 December 2015.

 

5.            Loss per share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 


Unaudited

Unaudited

Audited


6 months to

6 months to

12 months to


30 June

30 June

31 December


2016

2015

2015


£'000

£'000

£'000





 




Loss for the purpose of basic loss per share

(715)

(616)

(1,107)










Number

Number

Number

Weighted average number of ordinary shares for the




purpose of basic (loss)/earnings per share

227,560,827

227,560,827

227,560,827









(Loss)/earnings per share








Basic (loss)/earnings per share

(0.31)p

(0.27)p

(0.5)p





Diluted (loss)/earnings per share

(0.31)p

(0.27)p

(0.5)p

 

The dilutive effect in those periods was not material.

 

ServicePower Technologies plc

Notes to the condensed set of financial statements for the six months ended 30 June 2016

 

 

6.            Note to the cash flow statement

                               


Unaudited

Unaudited

Audited


6 months to

6 months to

12 months to


30 June

30 June

31 December


2016

2015

2015


£'000

£'000

£'000





Loss from operations

(671)

(529)

(1,085)

Adjustments for:




Depreciation of property, plant and equipment

67

56

124

Amortisation of intangible assets

245

226

419

Impairment of intangible assets

-

-

165

Share-based payments expense

30

30

29

Foreign exchange (gain)/loss

(212)

2

(71)

Operating cash flows before movements in working

(541)

(215)

(419)

capital




(Increase)/decrease in receivables

(385)

(727)

92

(Decrease)/increase in payables

(664)

(629)

(356)

Cash (used in)/generated by operations

(1,590)

(1,571)

(683)

Tax credit received

96

-

95

Net cash (used in)/generated from operating activities

(1,494)

(1,571)

(588)

 

 

 

 

 

 

 

 

 


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