Source - RNS
RNS Number : 5687L
Digital Globe Services Limited
04 October 2016
 

4 October 2016

 

Digital Globe Services, Ltd.

(the "Company", the "Group" and together with its subsidiaries "DGS")

 

Final Results for the year ended 30 June 2016

 

Digital Globe Services, Ltd. (AIM: DGS), a leading provider of digital marketing solutions for large, consumer-facing organisations, is pleased to report its Final Results for the year ended 30 June 2016.

 

Financial Highlights (US dollars)

  • Record revenue as a result of continued growth in core business and new verticals
    • Revenue increased 19% to $47.8M (FY15: $40.3M)
    • Revenue from verticals outside of the Company's core telecoms and media clients increased to $19.2M (FY15: $15.3M)
  • Gross margin compression in second half due primarily to increased marketing investment in core business and new verticals, resulting in gross margin for the year of 27.6% (FY15: 32.7%)
    • Gross profit of $13.2M (FY15: $13.2M)
  • Adjusted EBITDA* margin of 5.3% (FY15: 7.3%), reflecting investments in core business, technology enhancements and acquisition of on-shore call centre
    • Adjusted EBITDA* of $2.5M (FY15: $3.0M)
    • Underlying adjusted EBITDA of $3.3M before reallocation of $0.8M of revenue reversal
  • Net loss of $4.9M driven primarily by non-cash goodwill impairment of $1.4M, write-down of $3.3M of aging accounts receivables and $0.8M of revenue reversal**
  • Basic (loss) per share of ($0.18) (FY15: earning per share $0.09)
  • Balance sheet remains strong:
    • Cash on hand at 30 June 2016 of $1.3M (30 June 2015: $2.2M)
    • Additional cash availability of $3.5M from $5.0M short-term working capital revolver
    • No long term debt 
  • The board does not recommend the payment of a final dividend resulting in a total dividend for the period of $0.7M at $0.026 per share (FY15: $0.041) paid on 7 April 2016, resulting in a trailing dividend yield of approximately 4%***

 

Strategic and Operational Highlights

  • Significant investment in people and technology to expand into new verticals and geographies:
    • Further investment in dgSMART and dgsAPI expected to drive margin improvement in FY17
    • Acquisition of a US-based contact centre to drive profitable growth in expanding satellite vertical
  • Launched 7degrees in H2, a social media advertising services agency, further diversifying Group revenues into this rapidly growing market segment and providing strategic growth avenue for FY17 and beyond
  • Core customers continued their focus on subscriber acquisition and commercial services growth resulting in 21% YoY revenue increase
  • Bolstered executive team with addition of new CRO

 

Outlook

  • Investments made in FY16 will drive margin expansion and profitable growth for the year ahead
  • FY17 trading expected to show continued revenue growth and a significant increase in profitability
  • Anticipated further consolidation within the competitive environment expected to bring improved margins over time
  • Continued focus on three pillars of growth: expansion within the existing client base, extension into new geographical markets, and entrance into new industry verticals

 

Jeff Cox, CEO of DGS, commented:

"This financial year has been characterised by significant investment in both our technology and our people including growing our contact centre agent staff by 20%. Consequently we have recorded our highest ever revenue at $47.8M and increased our revenue from verticals outside of the Company's core telecoms and media clients to $19.2M from $15.3M in FY15. Furthermore, we are delighted to have won our first major European telecoms customer which we expect to start generating revenue for us in FY17. The consequence of the investments we made this year is a compression in margins causing our Adjusted EBITDA to drop to $2.5M from $3.0M in FY15. We expect the progress made in FY16 to continue into FY17 with a recovery in our margins as our investments bear fruit. We are confident in achieving continued growth and a significant increase in profitability in FY17."

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

 

For further information please contact:

 

Digital Globe Services, Ltd.

www.dgsworld.com

Jeff Cox, CEO

+1 303 736 2105 

 

 

Panmure Gordon (UK) Limited

+44 (0)207 886 2500

Karri Vuori / Andrew Godber / James Greenwood

 

 

Alma PR

+44 (0)208 004 4218

Josh Royston

 

Hilary Buchanan

 

 

 

Overview of DGS

 

Founded in 2008 with offices in London, Bermuda, Netherlands, USA and Ireland, DGS is a specialist provider of outsourced online customer, lead, and inquiry acquisition and digital media solutions for large, consumer-facing corporations. DGS delivers customers to its clients through optimised paid search, search engine optimization, mobile, integrated websites, e-mail, social media and contact centre support.

 

DGS is seeking to establish itself as the leading international provider of outsourced online customer, lead and inquiry acquisition, services, through its focus on having the premier technology platform in the industry. By using its optimising technology platform, dgSMART, and its experience of website management and digital media customer acquisition, efficient contact centre operations and other process expertise, DGS is able to acquire customers and achieve conversion rates that deliver profitable, high quality customers and valuable leads and inquiries to its clients.

 

DGS employs over 700 staff in Europe, North America and Asia. The Company currently has over 100 direct and indirect client relationships globally, many of which are with companies in the US Fortune 500.

 

 

 

Reconciliation of Net Profit/(Loss) to Adjusted EBITDA

 

Adjusted EBITDA Reconciliation in US$

2016

2015

2014

 

Net Profit/(Loss)

(4,944,537)

257,493

3,859,843

Plus/(Less)

 

 

 

Interest expense - net

209,885

 70,862

 5,258

Income Tax (Credit)/Expense

(153,190)

405,077

 (103,151)

Depreciation and amortisation

1,787,557

1,463,013

 851,981

Bank charges

42,702

96,534

 101,026

Foreign exchange gain or loss

15,837

9,123

 (58,595)

Change in fair value of warrant

(24,496)

(301,555)

 344,890

Restructuring costs

336,492

 194,117

 274,088

Write-back of contingent consideration

-

-

 (724,440)

Non-cash Employee Stock Option Plan charges

522,794

756,092

 781,470

Legal costs associated with acquisition

-

-

 57,300

One-time staff expense (training, relocation, medical)

32,552

-

 41,293

Goodwill impairment

1,425,587

-

-

Bad debt write off

3,275,960

-

 -

 

 

 

 

Adjusted EBITDA

2,527,143

2,950,756

 5,430,963

 

*EBITDA is earnings before interest, taxes, depreciation and amortisation.  "Adjusted EBITDA" additionally excludes bank facility and other charges, foreign exchange gains or losses, non-recurring restructuring costs and non-cash Employee Stock Option Plan Charges, warrants, legal costs associated with the EDU acquisition, non-recurring severance and other employee costs and write-back of contingent consideration.  A reconciliation is provided above.

 

** Assessed carrying value of intangibles and goodwill on the balance sheet for all entities and determined to impair $1.4M of DGS EDU goodwill. Board took the decision to write off or provision $3.3M of aging accounts receivables and reversal of $0.8M of revenue due to change in revenue recognition policy on merchant processing.

 

***Trailing dividend yield based on today's trading value: 4.3% = $0.026/(£0.47*$1.3/£1.0)

 

Chairman and Chief Executive Review

 

This has been a year of record sales for the Group combined with operational improvements. The Group has finished fiscal year 2016 as a larger business, with an expanded service and technology offering and in a better position to grow profitably than ever before. 

 

Throughout fiscal year 2016, the Group successfully grew top line revenue while also investing in the Group's growth and product and service offering. Key developments in the period include new business opportunities and revenue growth in the commercial cable space, a growing service offering outside of the Group's traditional domestic cable space; further expansion of the technology platform enabling deeper penetration into the value chain for cable service delivery; and the launch of a new service offering, 7degrees, which expands the Group's reach into the fast growing social media advertising space.

 

As a result, the Group delivered year over year revenue growth of 19%. Gross margins experienced compressions in the second half of the year, due in part to our entry into new industry verticals such as energy and utilities where we won new customers, as well as our strategic investments in growing the core business, investing in our technology and geographic expansion. Gross profit remained level at $13.2M and adjusted EBITDA declined by $0.5M to $2.5m. Net income was a loss of $4.9M due to $3.3M of aging accounts receivables written to bad debt and provision and $0.8M in revenue reversal due to change in revenue recognition policy for merchant activity (total revenue and AR treatment of $4.1M).  Gross margins and EBITDA are expected to recover to historic levels as new business matures and as the Group yields returns on the monetization of its technologies through third parties and new verticals.

 

The investments in significant core market share growth were reflected in our revenue growth but also margin compression as a result of higher direct labour costs associated with the acquisition of an on-shore call centre required for new vertical expansion, higher affiliate expenses required to service our expanding industry footprint and higher advertising expenses associated with higher overall volume share. As explained in the year-end trading update, management expects margins to return to historic levels as the Company uses its proprietary dgSmart technology to optimise performance of the expanded core business. In the first half of FY16, we successfully maintained the strong margins we delivered coming out of the last fiscal year, while over the course of the second half we expanded our core business, strengthened our technology and launched expansion efforts into new verticals.  We believe the Company is now in a better position in terms of technology and service offering, expanded core market share and customer relationships, and new revenue opportunities to drive sustainable, profitable revenue growth creating value for our shareholders and stakeholders in FY17 and beyond. 

 

Our core business and new verticals drove the strongest revenue performance the Company has ever delivered. The fiscal year returned to top-line growth rates of 19%; something that we and our shareholders expect. The future market opportunity remains robust. We continue to be recognised as a leader by our peers and partners in the rapidly growing global digital media advertising industry. The Company continues to see digital advertising budgets grow within its core clients as a result of their renewed focus on profitable revenue growth following multiple mergers within the cable space, and as we increase our market share, we remain focused on providing high quality consumer relationships for our customers. Additionally, we believe our 7degrees business has strategic and technology advantages over industry incumbents and expect this to create sizable future growth opportunity within the online advertising services space.

 

It is our privilege to work with a diverse set of colleagues across the globe. In the past three years, we have significantly bolstered the executive team, global management and technology groups, as well as expanded our lines of business across multiple verticals, channels and geographies. Our competitive advantage lies in our ability to quickly deploy new technology and human capital, as needed, to respond and anticipate our customers evolving needs in the rapidly evolving digital marketplace. The willingness and professionalism demonstrated by our teams is a credit to them. 

 

We pride ourselves on keeping management layers thin, our executives both highly accountable to performance objectives and close to our operations helps to further our Group growth strategy as we strive to become and stay the number one customer acquisition partner to our clients. Our Board has been strengthened over this past fiscal year with the additions of Dave Flowers and Simon Lee as Non-Executive Directors, and has continued to provide valuable strategic guidance and focus to growing the intrinsic value of the Group. We are grateful for the contributions of the entire team from each Board member to the first ad campaign builder on our marketing science team.  We are at an exciting point in our growth path and, following significant investment in FY16, we look forward to profitable growth in core business, new verticals and revenues in new geographic locations in FY17.

 

Financial Review

 

In the financial year ended 30 June 2016, the Group produced revenues of $47.8M (FY15: $40.3M; FY14: $38.9M) and $2.5M in adjusted EBITDA (FY15: $3.0M; FY14: $5.4M). The non-cash charge mandated by US GAAP for the Stock compensation expense for the year was $0.52M.  Reported operating (loss)/profit was ($4.9M) (FY15: $0.5M; FY14: $3.5M).

 

The Company expects to invest further in both geographical and vertical expansion in the coming year and will keep reserves for that expectation. Additionally, in accordance with the shareholder approval received in the Annual General Meeting on November 12, 2015, the Company will keep further reserves to make purchases of its own shares when the Board believes the intrinsic value of the Group is not properly reflected in the market capitalisation.  Such purchases will be made in accordance with the Bermuda law, the rules of the AIM Market of the London Stock Exchange, the By-Laws of the Company and the collar and cap requirements of the shareholder approvals.

 

The Group delivered adjusted EBITDA of $2.5M (FY15: $3.0M) for the period despite strategic second half investments in market share growth, technology and vertical expansion. We expect positive top line growth year over year to continue along with EBITDA margin improvement for the full year 2017, realizing the benefits of investments made this year.    

 

In the 3rd quarter of FY16, the Group amended its $3M Working Capital Facility with Heritage Bank of Commerce in San Jose California, United States, expanding the capacity to $5M. The amount drawn down on this facility as at 30 June 2016 was $1.5M. At the end of the first half of FY16, the Company maintained a cash balance of $0.6M.  At the end of FY16, the Company held a cash balance of $1.3M. The Group continues to produce cash, permitting it to make planned capital investment in further expansion or for acquisitions to support its three pillars of growth. During the period the Group wrote off as bad debt expense and made revenue adjustments totaling $4.1M.  $3.3M AR was booked as bad debt and provision ($1.4M bad debt, and a reserve against $1.9M of total accounts receivable that management believes is still collectable and continues to pursue) and reversed $0.8M of revenue based on a change in revenue recognition policy for merchant processing. As a result, accounts receivable decreased to $6.0M as against $10.2M at the half year.

 

In accordance with US GAAP standards as part of its annual impairment review, the Group is required to qualitatively test the intangible assets and goodwill for each entity and compare it to the entity's carrying value. The results of the qualitative assessment required that the EDU business be assessed via detailed quantitative analysis; the carrying value of which resulted in a lower value than the combined total of intangible assets and goodwill. Per US GAAP, the review and subsequent analysis required that we impair the full $1.4M of goodwill held in EDU. This is a non-cash adjustment that does not impact the ongoing operations of the Group or individual business units.

 

Operational Review

 

Business Model  

 

The Group's business model remains principally performance-based, where the Group earns revenue from fee-per-customer, lead and inquiry arrangements from its core business, as well as management fees based on account size and successes for its 7degrees business. Group clients pay a fixed commission for each customer, service, lead or inquiry that the Group successfully acquires on their behalf, as well as a percent-based fee for management services to the 7degrees business for its clients. The Group has expanded beyond paid search and search engine optimization ("SEO") and into e-mail, social media advertising and relationships with other companies that perform on-line customer acquisition activities. As Google, the Group's largest vendor, continues to adapt its business model to deliver more revenue through higher Cost-Per-Click, we will continue to ensure our proprietary systems can respond in such a way as to ensure the paid search business remains profitable while at the same time continuing to reduce the percentage of the overall cost of goods sold that paid search represents. The strategic launch and expansion of the 7degrees business has allowed the Group to not only expand its monthly advertising under management for itself and its clients, but diversify that more steadily into other advertising channels such as Facebook, Instagram and other emerging social advertising platforms. Through its new JV, ClearConnect, the Company has started to grow revenues from the commercial services offered by its core clients (JV FY16 revenue $170k). Typically, the business model for commercial accounts includes a one-time bounty paid up front, plus a recurring revenue model that is paid out over the lifetime of the customer.

 

Strategy

 

The Company has continued to focus on its three pillars of growth: growth within the core business, extension into new geographical markets, and entrance into new industry verticals. 

 

Expansion within core US clients

With its existing client base, we believe the Company continues to lead its competitors in organic revenue and market share growth. Relationships with our principal clients remain strong as we continue to focus on procuring those customers with the longest recurring value to our clients.  We believe that we have captured increased market share during the fiscal year as we had the flexibility to rapidly respond to market challenges that prompted consolidation amongst some of our competitors. During the year, we have expanded our relationships and won new customers within our core business resulting in increased volumes. This increased volume was driven by growth within the existing product suite of video and broadband services, and through the addition of home automation and security related products.

In late fiscal 2014 we began deploying our SaaS integration platform, dgsAPI, which permits national, regional and local affiliates to sell services on behalf of our clients. We have incorporated key capabilities of dgSmart into this platform and we will continue to focus on integrating these two technologies onto a unified platform.

 

It continues to be our belief that the newly formed entities resulting from the recent mergers between many of our largest clients will benefit the Company. For example, the merger of Charter and TimeWarnerCable includes the addition of over two million homes that are serviced by BrightHouse Communications but not currently serviced by the Company and therefore presents opportunities to significantly expand our addressable market. The Group intends to be the premier service provider to the evolving industry, recognised for its superior capabilities in driving new subscribers with greater customer lifetime value and an innovation partner in providing software platform solutions.

Extension into new Geographical Markets:

The Company has continued to explore geographic expansion that is both value and profit accretive. In July 2016, the Company signed an agreement with a European telecom operator and expects to launch services to this customer in the new financial year.

 

Entrance into New, Relevant Verticals:

The Group was able to grow revenues outside of its largest core telecoms and media clients from $15.3M in FY15 to $19.2M in FY16. The launch of our 7degrees business in FY16 leverages the strategic advantages the Company maintains in team size, performance, geographic location and cost within its marketing science division and enables the Company to grow revenues across verticals as digital advertising within the US and EMEA markets expands across Facebook and Google in particular. Our strategy is to continue to grow revenue from core clients while at the same time accelerating growth outside of the core cable and telco customers. We further expect to grow the customer acquisition business into the growing small and medium business sector through organic growth and acquisition.

 

Product and Service Development

 

During the FY16 we continued to expand resources in our Business Intelligence ("BI"), Analytics and Software Development Teams. Our entire BI team is Google Adwords Certified within one year of being hired. Additionally, we have implemented Facebook ad and SEO certification programmes for existing staff and new hires to further diversify and differentiate the skill set of the team. As a result, our BI team has developed a reputation for highly competent and client focused analysis that is valued by our clients and partners, which we believe will further enable our expansion within the existing client base and into new verticals. The investments in the BI team development enabled the launch of the 7degrees business in FY16, gaining quick recognition from both the Google and Facebook agency partner teams. Our focus on hiring software developers to build out our new business services lines and custom software for our clients and partners continues to yield results with additional efficiencies in ad spend and revenue increments, as well as the development of monetizable platforms.

 

Mobile search has become the predominant manner in which consumers shop. In the FY15 mobile search represented approximately 76% of click-throughs to our websites. In FY16, mobile search represented approximately 95% of click-throughs to our websites. In this same period, Click to Call to our call centres increased from 67% in FY15 to 95% in FY16. The focus of our development is to ensure that consumers have the maximum choice of two-way communication with us on any type of mobile or fixed device in the manner that the consumer chooses. With the growth in mobile, we invested heavily to be at the front of technology adoption and will continue to do so. Our advantages in technology and cost structure within our call centres offer long term, sustainable advantages over our competition.     

 

We operate and manage call centres in Pakistan, Philippines and the United States. We use our call centres to qualify and sell prospects products and services from our clients, unless those prospects complete a purchase exclusively on-line including via desktop or mobile internet. A significant number of our sales and qualified leads are derived from a prospect calling into a call centre based upon information from websites owned or operated by the Group. During FY16, we increased the number of call centre agents to meet increased usage on higher call volumes driving higher revenue.  Our retention rate in our Pakistani call centres is higher than industry averages, with a low voluntary employee turnover of approximately 5% per month. Given the continued leading performance of our Pakistani call centres, we intend to continue to expand our call centre footprint in our Lahore and Karachi centres when justified by demand. During FY16, we also acquired a US-based call centre in the Dallas, TX metro area, necessary to serve new partners operating in the energy and other new verticals requiring onshore centres.

 

Acquisitions

 

The Company continues to explore acquisition opportunities, both in the US and European markets, that align with our acquisition criteria.

 

Summary & Outlook

 

In the coming year we look forward to aggressively pursuing our three pillars of growth: expanding within the existing client base, extending our business into new geographies and expanding in new, relevant verticals. The Company has reacted decisively to align the business to service more effectively its core clients and we continue to invest in technology innovation to capture additional opportunities in other verticals and geographies, especially through the growth of our 7degrees business.  We have maintained growth throughout the year and expect to accelerate this momentum in the year ahead.   

 

3 October 2016


 

Zia Chishti

Jeff Cox

Chairman of the Board

Chief Executive Officer

 

 

 

Consolidated Statements of Income

For the year ended 30 June 2016

 

 

 

2016

2015

 

Notes

US$

US$

Revenue

 

47,751,712

40,271,031

Cost of Revenue

 

 

 

Search engine expenses

 

12,421,013

10,928,835

Lead generation

 

13,837,577

10,008,728

Call centre costs

 

5,562,235

4,564,860

Communication

 

 1,074,898

678,374

Other cost of revenue

 

1,662,105

904,385

Total cost of revenue

 

34,557,828

27,085,182

Gross profit

 

13,193,884

13,185,849

Selling, General and Administrative Expenses

 

 

 

General and administrative costs

 

704,296

 591,318

Salaries and other employee costs

 

6,377,347

6,720,538

Stock compensation expense

 

522,794

756,092

Third-party consultants

 

370,351

460,851

Rent and utilities

 

785,471

629,675

Traveling and entertainment

 

539,623

379,753

Insurance

 

505,779

497,961

Office supplies, printing, postage

 

  83,576

75,972

Communication

 

442,027

292,709

Legal and professional expenses

 

717,076

573,647

Depreciation and amortisation

 

1,787,557

1,463,013

Goodwill Impairment

6

1,425,587

         -

Foreign currency exchange loss

 

  15,837

  9,123

Write down of trade accounts receivables

 

3,275,960

         -

Other expenses

 

357,884

206,786

Total selling, general and administrative expenses

 

17,911,165

12,657,438

Operating (Loss)/Profit

 

(4,717,281)

528,411

Other Expenses/(Income)

 

 

 

Interest expense

 

209,885

70,862

Bank charges

 

42,702

96,534

Warrant

 

(24,496)

(301,555)

Share of loss of equity-accounted investees

 

152,355

 -

Total other expenses/(income)

 

380,446

 (134,159)

(Loss)/Profit before income taxes

 

(5,097,727)

662,570

Deferred Tax (benefit)/expense

7

 (210,887)

  304,949

Current Tax Expense

7

  57,697

100,128

Net (Loss)/Profit

 

(4,944,537)

257,493

(Loss)/Earnings per share - basic

11

(0.181)

0.009

(Loss)/Earnings per share - diluted

11

(0.181)

0.009

Shares used to compute basic earnings per share

11

27,318,424

27,326,448

Shares used to compute diluted earnings per share

11

27,577,498

27,701,503

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Other Comprehensive Income   

For the year ended 30 June 2016

 

 

 

Notes

2016

2015

 

 

US$

US$

 

 

 

 

(Loss)/Profit for the Year

 

(4,944,537)

257,493

 

 

 

 

Other Comprehensive income for the year

 

 

 

      -Foreign Currency Translation Difference

 

(98,051)

  -  

 

 

 

 

Total comprehensive (loss)/ income for the year

 

(5,042,588)

257,493

 

 

 

Consolidated Balance Sheets 

As at 30 June 2016

 

 

 

Notes

2016

2015

 

 

US$

US$

Assets

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

3

1,259,045

2,150,480

Trade accounts receivable, net of allowance for doubtful debt of $,1,905,282 (2015: Nil) as at June 30, 2016

 

5,966,688

10,200,707

Related-party receivables

9

624,373

270,384

Prepayments and other assets

 

662,155

1,214,166

Deferred tax asset

7

581,043

78,136

Total Current Assets

 

9,093,304

13,913,873

 

 

 

 

Non-Current Assets

 

 

 

Goodwill

6

260,632

1,631,969

Intangible Assets

5

2,778,065

3,320,594

Property and equipment, net of accumulated depreciation of $1,432,002 (2015: $903,577) as at 30 June 2016

4

1,079,935

1,116,433

Investment in Joint Venture

 

287,645

  -

Total Non-Current Assets

 

4,406,277

6,068,996

 

 

 

 

Total Assets

 

13,499,581

19,982,869

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current Liabilities

 

 

 

Revolving line of credit

 

1,505,109

1,792,301

Accounts payable

 

4,877,101

4,793,939

Related-party payables

9

440,778

250,200

Other liabilities

 

999,870

1,392,770

Income tax payable

7

191,683

140,623

Total Current Liabilities

 

8,014,541

8,369,833

 

 

 

 

Non-Current Liabilities

 

 

 

Deferred tax liabilities

7

405,086

113,067

 

 

 

 

Total Liabilities

 

8,419,627

8,482,900

 

 

 

 

Stockholders' Equity

 

 

 

Common stock, $0.001 par value, Authorised shares 120,000,000 shares, shares issued and outstanding 29,926,472 at 30 June 2016 and 30 June 2015

 

29,926

29,926

Additional paid-in capital

 

8,731,123

10,005,505

Treasury stock, at cost (71,665 shares)

 

 (78,549)

  -

Warrant

 

18,839

43,335

Accumulated and other comprehensive loss

 

 (98,303)

(252)

Retained (deficit)/earnings

 

(3,523,082)

1,421,455

Total Stockholders' Equity

 

5,079,954

11,499,969

Total Liabilities and Stockholders' Equity

 

13,499,581

19,982,869

 

 

Consolidated Statements of Stockholders' Equity

For the year ended 30 June 2016

 

Number of Shares in

Issue

Common

stock

Additional paid-in capital

Treasury

Stock

Warrant

Accumulated other comprehensive loss

Accumulated Deficit/Retained Earnings

Total

 

No

$

$

$

$

$

$

$

 

 

 

 

 

 

 

 

 

Balance, 30 June 2014

29,926,472

29,926

10,195,177

-

344,890

(252)

1,163,962

11,733,703

Stock Compensation expense

-

-

756,092

-

-

-

-

756,092

Stock option exercise

-

-

46,840

-

-

-

-

46,840

Fairvalue movement in Warrant

-

-

-

-

(301,555)

-

-

(301,555)

Net profit for the year

-

-

-

-

-

-

257,493

257,493

Dividend paid

-

-

(992,604)

-

-

-

-

(992,604)

Balance, 30 June 2015

29,926,472

29,926

10,005,505

-

43,335

(252)

1,421,455

11,499,969

Stock Compensation expense

-

-

522,794

-

-

-

-

522,794

Stock option exercise

-

-

58,668

-

-

-

-

58,668

Treasury stock buy back

-

-

-

(78,549)

-

-

-

(78,549)

Fairvalue movement in Warrant

-

-

-

-

(24,496)

-

-

(24,496)

Net loss for the year ended

-

-

-

-

-

-

(4,944,537)

(4,944,537)

Foreign currency translation

-

-

-

-

-

(98,051)

-

(98,051)

Dividend paid

-

-

(1,855,844)

-

-

-

-

(1,855,844)

Balance, 30 June 2016

29,926,472

29,926

8,731,123

(78,549)

18,839

(98,303)

(3,523,082)

5,079,954

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Cash Flow

For the year ended 30 June 2016

 

 

 

 

2016

2015

 

 

US$

US$

Cash flows from operating activities

 

 

 

Net (Loss)/Income

 

 (4,944,537)

257,493

Depreciation and amortisation

 

1,787,557

1,463,013

Goodwill Impairment

 

1,425,587

   -

Interest Expense

 

209,885

70,862

Income tax expense

 

51,060

73,239

Stock compensation expense

 

522,794

756,092

Share of loss of equity-accounted investees

 

152,355

        -

Fair value difference on warrant

 

 (98,051)

        -

Foreign currency translation loss

 

 (24,496)

  (301,555)

Adjustment to reconcile net income to net cash provided by operating activities:

 

 

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

4,234,019

  83,452

Related-party receivables

 

 (353,989)

 (127,168)

Prepayments and other assets

 

 367,011

   63,836

Accounts payable

 

   76,987

1,090,942

Related-party payables

 

190,578

250,200

Other liabilities

 

 (587,993)

31,655

Deferred tax - net

 

 (210,888)

304,949

Net cash provided by operating activities

 

2,797,879

4,017,010

Cash flows from investing activities

 

 

 

Acquisition of DSI business

 

(440,000)

   -

Investment in Joint Venture

 

 (440,000)

         -

Purchases of intangible assets

 

 (164,303)

 (2,229,337)

Purchases of tangible assets

 

 (278,384)

 (311,103)

Net cash used in investing activities

 

 (1,322,687)

 (2,540,440)

Cash flows from financing activities

 

 

 

Proceeds from revolving line of credit

 

42,457,237

28,828,490

Payment of revolving line of credit

 

 (42,744,429)

 (28,052,873)

Interest Paid

 

 (203,710)

  (65,524)

Proceeds from exercise of share options

 

  58,668

  46,840

Buy back of Treasury Shares

 

(78,549)

         -

Dividend paid

 

 (1,855,844)

  (992,604)

Net cash used in financing activities

 

  (2,366,627)

  (235,671)

Net (decrease)/increase in cash

 

 (891,435)

1,240,899

Cash at the beginning of the period

 

 2,150,480

 909,581

Cash at the end of the period

 

 1,259,045

2,150,480

Supplement disclosures of Cash Flow Information

 

 

 

Cash paid during the period for interest

 

 203,710

    64,524

Cash paid during the period for income tax

 

     -

  -   

 

 

 

Notes to the consolidated financial statements

30 June 2016

 

1. Segment reporting

 

The information being presented to and reviewed by the chief operating executive (i.e. the Group's Chief Executive Officer) is divided into three main reporting segments the company's core businesses DGS Inc., and Telsat Inc. as well as DGS EDU the education lead-generation business (EDU). DGS Inc. is the main business for core customers in the cable industry (Comcast, TimeWarner and Charter), Telsat Online Inc. (which includes the acquisition of the call center and affiliate relationships from DSI Distributing Inc.) for non-cable clients in telecommunications and telephone (CenturyLink and ATT), as well as satellite providers (DirecTV) and DGS EDU being the lead generation business for prospective students of for-profit and not-for profit universities and educational institutions.

 

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The segment performance is evaluated based upon Net Income.

 

The following table presents information of our various segments.

 

 

 

30 June 2016

 

DGS EDU

 

TELSAT

 

DGS INC

 

TOTAL

 

 

$

 

$

 

$

 

$

 

5,237,701

 

 5,217,621

 

    37,296,390

 

    47,751,712

 

  -

 

  -

 

    13,825,091

 

    13,825,091

 

                   -

 

                   -

 

      6,782,367

 

      6,782,367

 

                   -

 

                   -

 

      6,112,023

 

      6,112,023

 

         344,952

 

         145,129

 

      1,297,476

 

      1,787,557

 

      1,425,587

 

                   -

 

                   -

 

      1,425,587

 

                   -

 

                   -

 

         209,885

 

         209,885

 

     (3,275,543)

 

     (1,865,912)

 

         196,918

 

     (4,944,537)

 

                   -

 

                   -

 

          57,697

 

          57,697

 

                   -

 

                   -

 

         522,794

 

         522,794

 

      1,853,859

 

      3,888,869

 

      7,756,853

 

    13,499,581

 

                   -

 

         440,000

 

         882,687

 

      1,322,687

 

 

 

 

 

 

 

 

 

 

30 June 2015

 

DGS EDU

 

TELSAT

 

DGS INC

 

TOTAL

 

$

 

$

 

$

 

$

 

      6,802,927

 

4,122,994

 

    29,345,110

 

    40,271,031

 

                   -

 

                   -

 

    10,630,775

 

    10,630,775

 

                   -

 

                   -

 

      5,257,587

 

      5,257,587

 

                   -

 

                   -

 

      5,736,587

 

      5,736,587

 

         394,721

 

14,403

 

      1,053,889

 

      1,463,013

 

                   -

 

                   -

 

          70,862

 

          70,862

 

        (183,394)

 

        (667,888)

 

      1,108,775

 

         257,493

 

         371,755

 

        (618,678)

 

      2,443,368

 

      2,196,445

 

               428

 

          34,807

 

         369,842

 

         405,077

 

                   -

 

                   -

 

         756,092

 

         756,092

 

      5,079,740

 

      2,587,755

 

    12,315,374

 

    19,982,869

 

            1,385

 

                   -

 

      2,539,055

 

      2,540,440

 

 

Disclosed in the following table is the company's geographical information:

 

Geographic Information

30 June 2016

 

30 June 2015

 

 

Long-Lived

 

 

Long-Lived

 

Revenues

Assets

 

Revenues

Assets

 

$

$

 

$

$

United States and Canada

47,751,712

 180,340

 

40,271,031

 81,235

Pakistan

-

899,595

 

-

1,035,198

 

47,751,712

      1,079,935

 

    40,271,031

      1,116,433

 

2. Dividend

 

During the year ended 30 June 2016, the Group paid dividend of $1,855,844 (2015: $992,604) as follows:

 

30 June 2016

 

30 June 2015

Date

 

Dividend per share

 

Total Dividend

 

Date

 

Dividend per share

 

Total Dividend

23 September 2015

 

 £ 0.0269

 

 $1,132,930

 

28 October 2014

 

 £0.0224

 

 $ 992,604

11 March 2016

 

 £ 0.0181

 

 $ 722,914

 

 

 

 

 

 

 

 

3. Cash and cash equivalents

 

 

2016

 

2015

 

$

 

$

Cash in hand

8,505

 

   1,338

Cash in transit

809,588

 

 905,497

Cash at bank

 440,952

 

1,243,645

Total cash and cash equivalents

1,259,045

 

2,150,480

 

The group has foreign cash and cash equivalent currency balances at 30 June 2016 of $82,520 (2015: $45,179).

 

 

4. Property and equipment

 

 

2016

 

2015

 

$

 

$

Property and equipment - net

  920,421

 

1,105,369

Capital work in progress

  159,514

 

    11,064

Total property and equipment - net

1,079,935

 

1,116,433

 

 

 

 

 

2016

 

2015

 

$

 

$

Building

263,558

 

280,355

Computer and office equipment

1,139,477

 

1,021,229

Electrical equipment

423,902

 

372,971

Furniture and fixtures

525,486

 

334,391

 

2,352,423

 

2,008,946

Less: Accumulated depreciation

(1,432,002)

 

 (903,577)

Property and equipment - net

920,421

 

1,105,369

 

Depreciation for the years ended 30 June 2016 and 2015 amounted to approximately $528,425 and $502,311 respectively. There were no disposals or impairment during the year ended 30 June 2016.

 

 

5. Intangibles

 

Intangibles consist of the following:

 

 

30 June 2016

 

Weighted

 

 

 

 

 

 

 

average

 

Gross

 

 

 

Net

 

amortisation

 

carrying

 

Accumulated

 

carrying

 

period

 

amount

 

amortisation

 

amount

Amortising intangible assets:

 

 

$

 

$

 

$

Software

4-5 yrs

 

   3,613,640

 

         1,919,259

 

   1,694,381

Research & Development

3 yrs

 

        65,671

 

             56,562

 

          9,109

Covenant Not To Compete

2 yrs

 

      150,000

 

           150,000

 

                 -

Customer Based Intangibles

6 yrs

 

   1,674,300

 

           599,725

 

   1,074,575

Total

 

 

   5,503,611

 

         2,725,546

 

   2,778,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 June 2015

 

Weighted

 

 

 

 

 

 

 

average

 

Gross

 

 

 

Net

 

amortisation

 

carrying

 

Accumulated

 

carrying

 

period

 

amount

 

amortisation

 

amount

Amortising intangible assets:

 

 

$

 

$

 

$

Software

4-5 yrs

 

   3,449,337

 

         1,128,687

 

   2,320,650

Research & Development

3 yrs

 

        65,671

 

             34,671

 

        31,000

Covenant Not To Compete

2 yrs

 

      150,000

 

           125,000

 

        25,000

Customer Based Intangibles

6 yrs

 

   1,307,000

 

           363,056

 

      943,944

Total

 

 

   4,972,008

 

         1,651,414

 

   3,320,594

 

Aggregate amortisation expense for amortising intangible assets was $1,295,132 for the year ended June 30, 2016, this includes $185,000 for an asset that was put to use and fully amortised during the year and $960,702 for the year ended June 30, 2015. There were no disposals or impairment during the year ended 30 June 2016. Estimated amortisation expense for the next five years is: $890,345 in 2017, $712,276 in 2018, $555,575 in 2019, $488,906 in 2020 and $244,453 in 2021.

 

 

6. Goodwill

 

The Company performed its annual goodwill impairment test as of June 30, 2016. The Company performed a qualitative assessment of each reporting unit and determined that it was not more-likely-than-not that the fair value of the DGS Inc. and Telsat Online reporting units were less than their carrying amount. As a result, the two-step goodwill impairment test was not required and no impairments of goodwill were recognized in 2016.

 

For DGS EDU, the qualitative assessment required the two-step quantitative analysis of goodwill impairment to be conducted. When performing a quantitative assessment, we estimate the fair value of our EDU business based on a discounted cash flow over a 5 year horizon with a terminal value. Revenues, cost of goods sold and SG&A were extrapolated from current levels with the core business modeled as a stand-alone entity. The result of the analysis indicated that the reporting unit goodwill was impaired, and an impairment charge equal to the goodwill attributable to the DGS EDU business was recognised.

 

The changes in the carrying amount of goodwill for the year ended 2016 and 2015 are as follows:

 

 

Year ended 30 June 2016

 

TELSAT ONLINE

 

DGS EDU

 

DGS INC

 

TOTAL

 

$

 

$

 

$

 

$

Gross goodwill as on 1 July

                    -

 

       1,425,587

 

          206,382

 

       1,631,969

Goodwill acquired during the year 

            54,250

 

                    -

 

                    -

 

            54,250

Goodwill impaired during the year

                    -

 

      (1,425,587)

 

                    -

 

      (1,425,587)

Gross goodwill as on 30 June

            54,250

 

                    -

 

          206,382

 

          260,632

 

 

 

 

 

 

 

 

 

Year ended 30 June 2015

 

TELSAT ONLINE

 

DGS EDU

 

DGS INC

 

TOTAL

 

 

 

$

 

$

 

$

Gross goodwill as on 1 July

                    -

 

       1,425,587

 

          206,382

 

       1,631,969

Goodwill acquired during the year

                    -

 

                    -

 

                    -

 

                    -

Gross goodwill as on 30 June

                    -

 

       1,425,587

 

          206,382

 

       1,631,969

 

 

7. Income taxes

 

The tax provision consists of the following:

 

 

2016

 

2015

 

$

 

$

Current tax expense

 

 

 

Federal

  -

 

-

State Tax

      7,088

 

27,666

Foreign

  50,608

 

  72,462

 

57,697

 

100,128

Deferred tax (benefit)/expense

 

 

 

Federal

(190,614)

 

287,727

State Tax

 (20,273)

 

17,221

Foreign

         -

 

          -

 

(210,887)

 

304,949

 

 

 

 

Total income tax (credit)/expense

 (153,190)

 

405,077

 

 

 

 

 

The U.S. tax provision calculations include DGS, Inc, DGS Edu, LLC, Telsat Online, Inc, DGS Auto, LLC, DGS Lake Ball LLC and DGS 7 Degrees LLC. Additionally, included in the provision are DGS Cyprus Limited, DGS Tech (Ireland) and DGS BV (Netherland). DGS Private Limited (Pakistan) is exempt from corporate income tax under Pakistan's tax laws, being an exporter of IT enabled services. DGSL (Bermuda based holding company) became a UK tax resident on 26 June 2013 and files its tax return in the UK.

 

The Group recognizes deferred tax assets on deductible temporary differences and deferred tax liabilities on taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax bases. As those differences reverse, they enter into the determination of future taxable income included on the tax return. Management has evaluated the Group's tax positions and concluded that the Group had taken no uncertain tax positions that require adjustment to the consolidated financial statements. The Group recognizes interest and penalties related to uncertain tax positions in income tax expense.  As of 30 June 2016, the Group had no provision for interest or penalties related to uncertain tax positions.  The years 2011-2015 are open to examination by the tax authorities.

 

The following shows the nature and components of Group's deferred tax asset and liabilities:

 

 

2016

 

2015

 

$

 

$

Current deferred tax asset

 

 

 

Net operating losses

5,997,271

 

1,856,716

Valuation allowance

(5,877,195)

 

(1,922,640)

Amortisation of intangibles

460,654

 

   144,060

Depreciation

       313

 

           -

 

581,043

 

  78,136

 

 

 

 

Non-current deferred tax liabilities

 

 

 

Depreciation

 (362,499)

 

   50,616

Amortisation of intangibles

(42,587)

 

   62,451

 

 (405,086)

 

 113,067

 

 

The valuation allowance at June 30, 2016 was primarily related to net operating losses, in the judgment of management, are not more-likely-than-not to be realized. In assessing the realizability of deferred tax assets, which management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more-likely-than-not that the Group will realize the benefits of these deductible differences, net of the existing valuation allowances at June 30, 2016. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

 

At June 30, 2016, group's U.S. federal and state net operating loss carry forward for income tax purposes is $14.29 million ( June 30, 2015: $4.23 million) which will begin to expire in 2035.  Group's UK net operating loss carry forward for income tax purposes is $0.93 million (June 30, 2015: $0.81 million).  Group's Ireland and Cyprus net operating losses carry forward for income tax purpose are $1.61 million (June 30, 2015: $0.66 million) and $0.06 million (June 30, 2015: $0.06 million), respectively. These amounts are based on estimated amounts for the year ended June 30, 2016.

 

The income tax provision differs from the amount of income tax determined by applying the statutory tax rate to pretax income, due to the following:

 

 

 

 

2016

 

2015

 

%

$

 

%

$

 

 

 

 

 

 

Net (loss)/income for the year

 

(4,944,537)

 

 

257,493

Total income tax (benefit)/expense

 

 (153,190)

 

 

405,077

Net (loss)/income excluding income tax

 

(5,097,727)

 

 

662,570

 

 

 

 

 

 

Expected income tax expense using applicable tax rate

34.00

(1,733,227)

 

34.00

   225,275

State taxes, net of federal effect

4.29

  (218,613)

 

2.27

   15,031

Foreign subsidiaries taxed at lower rate or tax exempt

-19.15

  976,311

 

179.62

 1,190,146

Non-deductible expenses/Other

-16.13

   822,339

 

-154.76

(1,025,375)

Income tax (credit)/expense

3.01

 (153,190)

 

61.13

   405,077

 

 

 

8. Major customers and credit risk

 

Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. Financial instruments which potentially expose the Group to concentration of credit risk consist primarily of cash, accounts receivable and accounts payable. The Group's cash is held with US commercial banks.

 

The following table summarises those non-related party customers with revenue or accounts receivable in excess of 5 per cent of total revenue or total receivables for the twelve months ended 30 June 2016 and 30 June 2015. These concentrations cause risk and may have an impact on the operations of the company.

 

 

 

Year ended 30 June 2016

 

Revenue

 

Trade AR

 

Amount

Percentage of

 

Amount

Percentage of

 

($)

Total Revenue

 

($)

Total AR

 

 

 

 

 

 

Comcast Corporation

13,825,091

29%

 

1,882,590

32%

Time Warner Cable

6,782,367

14%

 

864,968

14%

Charter Communications

6,112,023

13%

 

519,544

9%

Cox Communication

3,797,510

8%

 

1,116,468

19%

Total

30,516,991

64%

 

4,383,570

74%

 

 

 

 

 

 

 

Year ended 30 June 2015

 

Revenue

 

Trade AR

 

Amount

Percentage of

 

Amount

Percentage of

 

($)

Total Revenue

 

($)

Total AR

 

 

 

 

 

 

Comcast Corporation

10,630,775

26%

 

3,902,641

39%

Time Warner Cable

5,257,587

13%

 

618,292

6%

Charter Communications

5,736,587

14%

 

580,270

6%

Cox Communication

2,418,063

6%

 

500,269

5%

Total

24,043,012

59%

 

5,601,472

56%

 

9. Related party transactions

 

The Group has service agreements for call centre and administrative services with subsidiaries of TRG. These agreements are in effect until terminated by either party and specify payments based on services performed. Expenses incurred for the year ended 30 June 2016, under these service agreements totaled $600,810 (2015: $647,906) which is included in call centre costs, communication expense and selling, general and administrative costs in the accompanying consolidated statements of income. The total net amounts due from these subsidiaries totaled $183,595 at 30 June 2016, (2015: $20,184) which is included under assets as related-party receivables, on the accompanying balance sheet.

 

10. Remuneration of Directors and other key management personnel

 

Remuneration of those serving as Directors during the year is analysed below:

 

 

 

For the year ended 30 June 2016

 

 

Salary

Bonus

Fees

Compensation for loss of office

Total

 

 

$

$

$

$

$

Jeff Cox

 

              309,000

               45,000

                        -

   -

              354,000

Andrew Lear

 

              185,657

               30,000

                        -

    -

              215,657

Sandra Rodger

 

                        -

                        -

                        -

     -

                        -

Amit Basak

 

                        -

                        -

               15,595

     -

               15,595

Sam Howe

 

                        -

                        -

                        -

      -

                        -

Anthony Watson

 

                        -

                        -

               32,291

      -

               32,291

Simon Lee

 

                        -

                        -

               18,919

      -

               18,919

Dave Flowers

 

                        -

                        -

               29,280

       -

               29,280

Total

 

              494,657

               75,000

               96,085

        -

              665,742

 

 

 

 

For the year ended 30 June 2015:

 

 

Salary

Bonus

Fees

Compensation for loss of office

Total

 

 

$

$

$

$

$

Jeff Cox

 

              289,583

                        -

                        -

    -

              289,583

Sandra Rodger

 

              103,863

                        -

                        -

               57,145

              161,008

Amit Basak

 

                        -

                        -

               35,000

     -

               35,000

Sam Howe

 

                        -

                        -

               13,125

     -

               13,125

Anthony Watson

 

                        -

                        -

               35,000

     -

               35,000

Total

 

              393,446

                        -

               83,125

               57,145

              533,716

 

 

No pension payments are made for Directors.

 

Details of share options granted to the Directors are as follows:

 

 

At 30 June 2015

Granted in the period

Exercised

Lapsed/Canceled/Expired

At 30 June 2016

 

No.

No.

No.

No.

No.

Jeff Cox

     -

   -

       -

      -

        -

Andrew Lear *

  200,535

       -

    -

      -

    200,535

Sandra Rodger

    -

   -

      -

     -

        -

Amit Basak

   22,730

  -

 (22,730)

   -

           -

Sam Howe

     -

-

       -

   -

          -

Anthony Watson

     33,416

   -

   (33,416)

     -

            -

Dave Flowers *

  20,000

  74,906

      -

     -

      94,906

Simon Lee

     -

  74,906

        -

      -

     74,906

Total

 276,681

149,812

     (56,146)

   -

     370,347

 

*Andrew Lear and Dave Flowers were appointed as the CFO and Non-Executive Director respectively, on October 15, 2015.

 

 

At 30 June 2014

Granted in the period

Exercised

Lapsed/Canceled/Expired

At 30 June 2015

 

No.

No.

No.

No.

No.

Jeff Cox

   -

        -

   -

  -

   -

Sandra Rodger

370,837

    -

    -

  (370,837)

  -

Amit Basak

  22,730

        -

   -

    -

 22,730

Sam Howe

   64,178

  -

  (40,111)

  (24,067)

   -

Anthony Watson

   33,416

    -

    -

    -

  33,416

Total

  491,161

  -

   (40,111)

(394,904)

 56,146

 

 

The following are the details of shares exercised during the year:

 

 

30 June 2016

 

Exercise Price

Exercise Date

Gain on exercise of Option

 

$

 

$

Anthony Watson

0.01

04 April 2016

 38,770

 

 

 

 

 

30 June 2015

 

Exercise Price

Exercise Date

Gain on exercise of Option

 

$

 

$

Sam Howe

0.01

22 December 2014

   401

 

 

The following are the details of share options outstanding:

 

 

30 June 2016

 

Strike Price

Vesting Dates

 

$

 

2013 Stock Options Plan

 

Andrew Lear

2.34

25% vested on 1 April 2013 and remainder equally per month for next 36 months

Dave Flowers

0.01

50% vested on 1 June 2015 and remaining 50% on 1 January 2017

2015 Stock Options Plan

 

Andrew Lear

0.48

25% vested on 1 April 2016 and remainder equally per month for next 36 months

Dave Flowers

0.01

25% vested on 1 April 2016 and remainder equally per month for next 36 months

Simon Lee

0.01

25% vested on 1 June 2016 and remainder equally per month for next 36 months

 

 

 

 

30 June 2015

 

Strike Price

Vesting Dates

 

$

 

2013 Stock Options Plan

 

Amit Basak

0.01

50% vested on 1 April 2013 and remainder equally per month for next 36 months

Anthony Watson

0.01

50% vested on 1 April 2013 and remainder equally per month for next 36 months

2015 Stock Options Plan

 

Amit Basak

N/A

N/A

Anthony Watson

N/A

N/A

 

 

11. (Loss)/Earnings Per Share

 

 

For the year ended 30 June 2016

 

Income

 

Shares

 

Per-Share

 

(Numerator)

 

(Denominator)

 

Amount

Basic EPS

 

 

 

 

 

Loss

  (4,944,537)

 

  27,318,424

 

 $  (0.181)

 

 

 

 

 

 

Effect of Dilutive Securities

 

 

 

 

 

Options

 

 

          259,074

 

 

Warrants

 

 

 

 

 

Diluted EPS

 

 

 

 

 

Loss before assumed conversions

 (4,944,537)

 

   27,577,498

 

 $ (0.181)

 

 

 

 

 

 

 

For the year ended 30 June 2015

 

Income

 

Shares

 

Per-Share

 

(Numerator)

 

(Denominator)

 

Amount

Basic EPS

 

 

 

 

 

Income

       257,493

 

   27,326,448

 

 $  0.009

 

 

 

 

 

 

Effect of Dilutive Securities

 

 

 

 

 

Options

 

 

          375,055

 

 

Warrants

 

 

                      -

 

 

Diluted EPS

 

 

 

 

 

Income before assumed conversions

       257,493

 

   27,701,503

 

 $  0.009

 

 

 

 

 

 

Options to purchase the following shares were outstanding at 30 June 2016 but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares.

 

30 June 2016

Number of Shares

Exercise Price

    224,448

1.74

    578,961

2.34

    37,417

2.00

     155,654

3.01

30 June 2015

Number of Shares

Exercise Price

    1,265,119

2.34

      450,654

3.55

    137,251

2.36

     224,448

2.05

 


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