Source - RNS
RNS Number : 2213J
Blue Prism Group PLC
27 June 2017
 

27 June 2017

Blue Prism Group plc

("Blue Prism" or the "Group")

Interim Results for the six months ended 30 April 2017

Blue Prism, a global leader in Robotic Process Automation ("RPA"), is pleased to announce its interim results for the six months to 30 April 2017. Today's results reflect a period in which strong progress has been made and sales momentum with existing and new customers has increased, driven by our global partner ecosystem.

Financial Highlights

·     Recognised revenue increased 133% to £9.3m (H1 2016: £4.0m)

·     Recurring revenue represented 91% of total revenue (H1 2016: 83%)

·     Exit run-rate (recognised, recurring licence revenue) increased to £1.72m per month (H1 2016: £0.66m per month)

·     Adjusted EBITDA loss of £2.7m (H1 2016: loss of £1.4m)*

·     Cash and cash equivalents at 30 April 2017 were £10.6m (30 April 2016: £11.2m)

*EBITDA loss adjusted to exclude share-based payments.

Operational Highlights

·     Sales momentum continued, with 209 deals secured during the period, constituting:

118 new customers (H1 2016: 33 new customers)

83 upsells secured across 53 customers (H1 2016: 28 upsells across 15 customers)

Eight renewals, amounting to a 100% renewal rate (H1 2016: three renewals)

·     Customer base now stands at 271 (H1 2016: 90)

·     100% of new customers secured through our partner ecosystem

·     Investment in the US showing progress, with 32 new customers signed during the period in addition to 19 upsells and one renewal

Total US customer base now stands at 58

·     Additional geographies now opening, including Australia, Japan and India

·     Global employee base increased to 127 (FY 2016: 86), of whom 46 are based in the US

·     Launched new "Operating System for the Digital Workforce" proposition and Technology Alliance Programme, supported by the announcement of Blue Prism version 6.0

Alastair Bathgate, CEO, commented:

"We have made strong progress during the first half and are pleased to see the sales momentum within our business continue to build. Our indirect go to market strategy has been a key enabler of this progress, and we continue to invest in upskilling and engaging our global and international partners, so that together we can be increasingly effective in delivering transformational solutions.

The RPA market continues to expand rapidly and our strong sales pipeline gives us confidence for further growth in the second half of 2017. Our strong, differentiated and widely applicable product, highly motivated and talented team and global partner and customer relationships make for a strong foundation to build upon."

 

For further information please contact:

  Blue Prism Group plc

Alastair Bathgate, Chief Executive Officer

Gary Johnson, Chief Financial Officer 

via FTI Consulting

Investec Bank plc

Andrew Pinder

Sebastian Lawrence

Carlton Nelson 

Tel: +44 (0)20 7597 5970

FTI Consulting

Matt Dixon

Dwight Burden

Tel: +44 (0)20 3727 1137

[email protected]

 

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 30 April 2017, Blue Prism had 127 employees based out of offices in Newton le Willows and London (UK), Sydney (Australia), Austin, Miami, Chicago, New York and San Francisco (US).

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



 

Interim results for the six months ended 30 April 2017

OVERVIEW

The past six months have seen encouraging sales growth as we continue to expand and deliver against our stated targets. Businesses are increasingly aware of the significant potential that RPA holds for their operational efficiency and effectiveness; our channel partners have continued to engage with us in identifying and converting the opportunity at hand; and we continue to invest in the geographies which, we believe, will generate meaningful returns over the long-term.

Evidence of this progress can be seen in our top line performance, as well as in the increasing quality and visibility of our revenue stream. During the past six months, the Group grew recognised revenue by 133% to £9.3m with recurring revenue accounting for 91% of total revenue (H1 2016: 83%). Exit run-rate, which serves as an indicator of the momentum in our recurring licence revenue, grew 161% year-on-year to £1.72m per month (H1 2016: £0.66m per month). This progress has been driven by our partners' continued engagement with our product and by our customers, both existing and new.  

While the long-term growth opportunity remains, supported by our strong pipeline, it does require that we take sensible, near-term steps to ensure we maintain our leading market position. To that end we have continued to invest in our business, primarily within sales and marketing but also in our software. As a result, the Group reported an adjusted EBITDA loss of £2.7m in the first half (H1 2016: £1.4m). Our strong cash position continues to provide us with the ability to make these investments, with cash and cash equivalents at the period end standing at £10.6m (30 April 2016: £11.2m).

MARKET REVIEW

Blue Prism is a leader in the emerging global technology category of RPA. This involves the supply, by Blue Prism, of a Digital Workforce powered by Software Robots that are trained to automate routine back-office clerical tasks. Large enterprises with significant back-office operations are the target customers for our RPA software. Organisations of this kind are increasingly looking at ways to complement their existing human workforce with digital employees, better suited to performing routine processes, freeing up human workers to undertake more creative, more valuable pursuits, whilst reducing operational cost and improving service levels.

The RPA market is increasingly large and global. Whilst maintaining focus on the US, our key strategic territory, we are starting to invest in new geographies, for example, Japan, the world's third largest economy, where RPA is in the earliest stages of inception and where demographics and local regulatory frameworks provide an important driver to RPA adoption.

The global RPA market - as is the case with any growth market - is one where competition is healthy.  Multiple organisations are seeking to take advantage of the opportunity, but our position relative to this competition remains strong.  We believe that the market is starting to recognise the difference between agent-assisted desktop automation and the autonomous RPA that Blue Prism provides which is secure, scalable, resilient and supports regulatory compliance and operational agility. Customers and partners are starting to collaborate to create standards under the IEEE framework that support this differentiation.

 

 

 

OPERATIONAL REVIEW

Blue Prism ended the period with substantial momentum across all areas of licence activity. This has been driven by targeted investment in our sales and marketing teams, returns from our investment in the US, and the further development of our scalable indirect sales channel that includes some of the world's largest consulting and technology firms in the RPA ecosystem. 

Customer and sales growth

In H1 2017 Blue Prism reported a more than 3x increase in total customer licence deals compared to H1 2016:

Customer licence deals

H1 2017

H2 2016

H1 2016

New

118

63

33

Renewals

8

9

3

Upsells

83

53

28

Total

209

125

64

 

Perhaps the clearest evidence of the increased market awareness for RPA is the growth in first half new customer licence deals.  During H1 2017 we grew the number of new customers using Blue Prism software by 118, compared with 33 in H1 2016. The Group also continued to report a 100% renewal rate, with eight renewals in the period. 

Whilst new customer signings are important, the fact that many of our existing customers have increased their use of our software validates its capabilities and the value it delivers. The rate of upsells secured in H1 2017 trebled that seen in H1 2016 with 53 customers increasing their use of the Group's software across 83 licence deals.

Employees

Following our recent openings in Tokyo and Bangalore, post period end, we now have a total of ten offices across the US, EMEA and AsiaPac. Through investment in our customer service hubs in Austin Texas, Sydney and Newton-le-Willows we can now deliver world class 24/7 customer support.

During the period, our global employee base increased from 86 at the end of October 2016 to 127. We have made considerable investment in our global sales and marketing teams, notably in the US which remains our largest sales force. We will continue to invest across the Group to take further advantage of the growing global RPA opportunity.

Executing Our Strategy

The Group has made material progress over the past six months against the four areas of strategic focus as it seeks to build sustainable long-term shareholder value:

Building scalable development, sales and delivery channels

At the time of our IPO, we made it clear that our focus as a public company would rest on building and then leveraging a powerful global indirect sales channel. It remains our view that this is the most effective and efficient way to grow our business.

The results of the first half validate this strategy, with all new customers secured through our partner ecosystem, which includes global alliances and specialist resellers, who typically address specific geographies and/or industries.

During the first half, we grew the number of indirectly sourced customers to 242, compared to 124 reported at the end of FY 2016. This means that 89% of our total customer base has now come to us via our indirect channel, with 100% of those sourced in the first half secured in this way. 

This indirect route to market is built on a shared vision for the RPA market and its future potential. The June 2017 inaugural edition of Blue Prism World, our annual conference for customers and partners, was sold out, with overflow attendees watching from remote rooms via video link. This year's New York and London conferences were attended by almost 1,200 people drawn from our customers and partners.  The events were sponsored by many of our global partners such as Accenture, IBM, EY, Deloitte, KPMG, Capgemini and Appian, as well as specialist resellers including Symphony and Digital Workforce. The scale of endorsement received further cements our position as an important force in the enterprise segment of the RPA market and as a thought leader for the industry overall.

Increasing business with the Group's customers

The introduction of account management has helped drive increased levels of upsells from across the Group's existing customer base. The return on investment generated through the increasing adoption of Blue Prism's RPA solution within digital strategies is clearly demonstrated through the 83 upsells across 53 customers reported during the first half. To contextualise this growth, during H1 2016, Blue Prism reported 28 upsells, and 81 for the entire 2016 financial year. As well as progress in upsells, the Group signed eight renewals in the period.

The Group is focused on continuing to build a successful account management framework. As the business continues to increase sales via its indirect route to market, it will be essential to ensure our partners are equipped with the requisite tools, training and resource to maintain successful sales, delivery and demonstrate the value of our software. While still in its infancy, we believe this approach to account management and partner engagement will generate significant value in enabling our partners to effectively upsell in the longer term.

Executing on the Group's US market strategy

The US is the world's leading technology economy and the Group has made significant investments in people and partners to succeed in the US, based around our HQ and tech and support hub in Austin Texas supported by additional satellite sales offices.

These investments are already driving results. We are pleased to report that at the end of H1 we now have 58 US customers, representing 21% of our total customer base.

This customer growth means that we are able to report good financial momentum for H1 2017, with revenues of £3.3m representing 35% of Group revenue.

Looking ahead, we will continue to focus on developing our channel partner ecosystem and making focussed investment to support existing customers and help accelerate future growth in the US, as well as leveraging our experience of sales and marketing into other parts of the world.

 

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

The Group is a recognised leader in the RPA market and has continued to build on this position in the first half. Alongside our aim to reinvest approximately ten per cent of our revenues into R&D, we announced the Technology Alliance Programme. This initiative seeks to build and assure interoperability between Blue Prism software and other third party products, with the objective of positioning Blue Prism as the de-facto execution engine or "operating system" at the centre of an emerging digital workforce ecosystem.  This will enable our customers and partners to build increasingly sophisticated deployments offering new and leading-edge artificial intelligence, cognitive and cloud capabilities.

We also established a comprehensive Certification Programme for our partners designed to assure quality in sales and delivery. Since its inception, we have certified eight partners, with EY being the first to attain Gold standard.

As with any early technology market, skills shortages can become a potential barrier to customer adoption. We remain committed to addressing this through training partnerships and autonomous training kits which enable partners and customers to build their own internal training capabilities. Within one year, the number of accredited Blue Prism developers has increased to over 2,000 from 300.

Shortly after the period end we announced version 6.0 of our software, which will provide accelerated automation, better delegation and control in large scale deployments, and the ability to translate the user interface, which will be important in countries like Japan.

We saw further validation of our strength in the most recent Forrester report - The Forrester Wave™: Robotic Process Automation, Q1 2017 - where Blue Prism received the top score for deployment, governance and security and upon which the enhancements in version 6.0 will build.

 

SUMMARY AND OUTLOOK

Corporate awareness of the value of RPA continues to grow and our position as a trusted brand with a differentiated, enterprise-ready product positions us well in what is a very dynamic market. 

We are delighted with our progress: strategically, operationally and commercially. We continue to invest in global expansion, with a major focus on sales and marketing, whilst driving product development and building our organisation's infrastructure as the company continues to grow. The RPA market continues to expand rapidly and our strong sales pipeline gives us confidence for further growth in the second half of 2017. 

 

 



 

Financial Review

Revenue

Recognised revenue for the period increased 133% to £9.3m (H1 2016: £4.0m). Of the recognised revenues, £8.5m or 91% were recurring licence fees. Professional Services revenues accounted for £0.8m, of which Training represented £0.2m. Monthly exit run rate, which illustrates the momentum in recognised recurring licence revenues, grew to £1.72m per month, up 161% on H1 2016 and 82% on October's FY 2016 exit run rate. This run rate is a clear indicator of the strong momentum in the business and provides a solid platform for the rest of the financial year.

Recognised revenues by region were as follows:

 

H1 2017

H1 2016

 

 

£'m

%

£'m

%

EMEA

5.8

62

3.2

80

Americas

3.3

35

0.8

20

APAC

0.2

3

0.0

0

 

In the US, strong customer growth has translated into financial momentum during H1 2017, with revenues of £3.3m. This was 35% of Group revenue, up from £2.7m or 28% of Group revenue at the end of FY 2016.

Loss from Operations

Losses from operations for the period were £3.1m, including share-based payments, compared to £1.4m, including share-based payments but excluding IPO costs, in H1 2016, as the Group continued its strategy to grow the business globally and therefore invested further in its global sales and marketing activities.

Statement of Financial Position

Deferred revenue, which is the value invoiced less the recognised revenue in the year, grew 59% from the end of the prior financial year to £16.5m (H1 2016: £5.9m, FY 2016: £10.4m). This increase is the result of the strong growth achieved in new business and includes prepayments of £2.0m from a small number of customers who paid their multi-year licence fees in advance.

Trade and other receivables increased by 70% from the end of the prior financial year to £9.5m (H1 2016: £2.6m, FY 2016: £5.6m).

There are no intangibles on the balance sheet and the research and development costs have been expensed as none of the expenditure met the criteria for capitalisation. 

Cash Flows

Cash and cash equivalents at the period end were £10.6m (30 April 2016: £11.2m), reflecting the significant investment in Sales and Marketing. The period end cash balance includes the receipt of £2.0m in licence pre-payments represented above.

Additionally, the Group continues to have access to a £2.0m Revolving Credit Facility which is currently unutilised.

Gary Johnson, Finance Director

 

Blue Prism Group PLC

Consolidated statement of comprehensive loss for the six month period ended 30 April 2017

 



Unaudited

Six months ended 30 Apr 2017

Unaudited

Six months ended 30 Apr 2016

Restated

Audited

Year ended

31 Oct 2016


Note

£'000

£'000

£'000

Revenue

3

9,350

4,017

9,644

Cost of sales


(10)

(27)

(67)

Gross profit


9,340

3,990

9,577

Administrative expenses


(12,032)

(5,378)

(13,987)

Share based payments

9

(417)

(60)

(362)

 

Exceptional expenses


-

(502)

(502)

Loss from operations


(3,109)

(1,950)

(5,274)

Finance income


3

6

25

Loss on ordinary activities before taxation


(3,106)

(1,944)

(5,249)

Income tax charge


-

-

(69)

Loss for the financial period and total comprehensive loss attributable to the equity holders of the parent company


(3,106)

(1,944)

(5,318)






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

7

(4.99)

(5.03)

(10.53)

 



 

Blue Prism Group PLC

 

Consolidated statement of financial position at 30 April 2017

 






Unaudited

Six months ended 30 Apr 2017

Unaudited

Six months ended 30 Apr 2016

Restated

Audited

Year ended

31 Oct 2016





Note

£'000

 £'000

£'000

Non-current assets







Property, plant and equipment



216

83

158

Deferred tax assets



-

69

-

Total non-current assets



216

152

158









Current assets







Trade and other receivables


4

9,517

2,582

5,585

Cash and cash equivalents



10,639

11,193

11,788

Total current assets



20,156

13,775

17,373









Total assets




20,372

13,927

17,531









Current liabilities







Trade and other payables


5

2,601

1,086

 

3,224

Deferred revenue


5

12,458

4,620

9,079

Corporation tax payable



-

2

-

Total current liabilities



15,059

5,708

12,303

Non-current liabilities







Deferred revenue



6

4,001

1,277

1,358

Total liabilities




19,060

6,985

13,661









Net assets/(liabilities)




1,312

6,942

3,870









Equity attributable to shareholders



Issued capital


8

1,676

1,674

1,674

Share premium




9,335

9,194

9,194

Merger Reserve




356

356

356

Share based payment reserve



704

60

287

FX reserve



(12)

-

-

Accumulated losses




(10,747)

(4,342)

(7,641)






1,312

6,942

3,870

 

 

                   



 

Blue Prism Group PLC

 

The consolidated statement of cash flows for the six months ended 30 April 2017

 




Unaudited

Six months

Ended

 30 Apr 2017

Unaudited

 Six months

Ended

30 Apr 2016

Restated

Audited

 Year

Ended

 31 Oct 2016




 £'000

 £'000

£'000

Cash flows from operating activities






Loss before tax


(3,106)

(1,944)

(5,318)

Adjustments for:






Depreciation


40

15

39


Finance income


(3)

(6)

 (25)


Income tax expense


-

-

69


Share based payment expense


417

60

362

 

Operating (loss)/profit before working capital changes


(2,652)

(1,875)

(4,873)

Changes in working capital






Increase in trade and other receivables


(3,932)

(1,055)

(4,119)


Increase in trade and other payables and deferred revenue


5,399

2,347

9,085

Cash (outflow)/inflow from operating activities


(1,185)

(583)

93








Tax Paid


-

-

(2)







Net cash (outflow)/inflow from operating activities


(1,185)

(583)

91







Investing activities






Interest received


3

6

25


Purchase of property, plant and equipment


(98)

(56)

(154)







Net cash outflow from investing activities


(95)

(50)

(129)







Financing activities






Proceeds from the issuance of ordinary shares

143

9,475

9,475







Net cash inflow from financing activities


143

9,475

9,475






Net change in cash and cash equivalents


(1,137)

8,842

9,437

Cash and cash equivalents at the beginning of the period

11,788

2,351

2,351

Effect of movements in exchange rates on cash and cash equivalents

(12)

-

-

Cash and cash equivalents at the end of the period


10,639

11,193

11,788

 

 

 

 

 

Blue Prism Group PLC

 

Consolidated statement of changes in equity for the six month period ended 30 April 2017

 


 

 

      Share

    capital

      

 

 £'000

 

 

Share

premium

 Restated

 

 £'000

 

 

 

 Share based payment reserve

 

£'000

     

Merger reserve Restated

 

£'000

 

 

 

FX Reserve 

 

 

£'000   

 

 

Accumulated losses

Restated

 

£'000

 

 

 

Total

Equity

 

 

£'000

 

Equity as at 31 October 2015

1,393

356

104

 

-

 

-

(2,502)

(649)

 

Transfer at IPO

-

(356)

-

 

356

 

-

-

-

 

Exercise of Options

153

5

-

 

-

 

-

-

158

Issue of shares at IPO

128

9,872

-

 

-

 

-

-

10,000

Cost of issuing new shares

-

(683)

-

 

-

 

-

-

(683)

Comprehensive loss for the 6 months to 30 April 2016

-

-

-

 

-

 

-

(1,944)

(1,944)

Share based payment

-

-

60

 

-

 

-

-

60

Transfer between Reserves

-

-

(104)

 

-

 

-

104

-

Equity as at 30 April 2016             

1,674

9,194

60

 

356

 

-

(4,342)

6,942

Share based payment

-

-

227

 

-

 

-

75

302

Comprehensive loss for the 6 months to 31 October 2016

-

-

-

 

-

 

-

(3,374)

(3,374)

Equity as at 31 October 2016

1,674

9,194

287

 

356

 

-

(7,641)

3,870

 

Share based payment

-

-

417

 

-

 

-

-

417

Exercise of Options

2

141

-

 

-

 

-

-

143

FX reserve

-

-

-

 

-

 

(12)

-

(12)

Comprehensive loss for the 6 months to 30 April 2017

-

-

-

 

-

 

-

(3,106)

(3,106)

Equity as at 30 April 2017

1,676

9,335

704

 

356

 

(12)

(10,747)

1,312

                                                                                                                                                                       



Blue Prism Group PLC

 

Notes forming part of the financial statements for the six months ended 30 April 2017

 

1.            Corporate information

 

The consolidated financial information represents the results of Blue Prism Group PLC ("Holding Company"), Blue Prism Limited ("the company") and its subsidiaries Blue Prism Software Inc. and Blue Prism Pty Ltd, together referred to as "the Group". On 16th December 2016, Blue Prism Pty Ltd was incorporated in Australia as a subsidiary of Blue Prism Limited. Blue Prism Group PLC and Blue Prism Limited are incorporated and domiciled in the UK. Blue Prism Software Inc. is incorporated in the US.

 

2.            Accounting policies

 

The principal accounting policies applied in the preparation of these interim financial statements are summarised below. They have all been applied consistently throughout the current and preceding period.

 

Basis of preparation

 

The financial information presented in these interim financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the EU. The principal accounting policies adopted in the preparation of the financial information in this announcement are unchanged from those used in the audited financial statements for the year ended 31 October 2016 and are consistent with those that the company expects to apply in its financial statements for the year ended 31 October 2017.

 

The financial information for the periods ended 30 April 2017 and 30 April 2016 presented in these interim financial statements do not constitute the statutory accounts for those periods, and are unaudited. The company's Annual Report and Accounts for the year ended 31 October 2016 have been audited and filed with the Registrar of Companies. The Independent Auditors' Report on the company's Annual Report and Accounts for the year ended 31 October 2016 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006.

 

Basis of accounting

 

The financial statements of the company 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 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 1 January 2018. The directors have begun to assess the potential effects of this standard on the way revenue is recognised. A study on the potential impact will be carried out during the year.

 

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.

 

Basis of consolidation

 

The interim financial statements incorporate the results of Blue Prism Group Plc and its subsidiary undertakings as at 30 April 2017. The results of its subsidiary undertakings are included from the date of acquisition or registration.

 

Operating segments     

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the Board of Directors.

 

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 three geographical areas: EMEA, the Americas and APAC. The Board of Directors only monitors revenue on this basis. Business performance is otherwise monitored by reference to total results against budget. 

 

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 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 to be 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. From 1 November 2016, the functional currency of Blue Prism Software Inc. changed from GBP to USD.

 

Group reorganisation and prior period restatement

 

The Group was restructured prior to the IPO in March 2016. 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 re-organisations are outside of IFRS3 as the company does not meet the definition of a business and as such was accounted for as a group reorganization in that year rather than a reverse acquisition.

 

The Group reconstruction was 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.

 

In the Interim statements for the six months to 30 April 2016, IPO costs were shown as a cost to the Profit & Loss of £1,185k. Following the audit for the year ended 31 October 2016, this treatment was amended so that the transaction costs that relate directly to the issue of the new equity instruments, £683k, have been accounted for as a deduction from equity. The balance of £502k, was included as an exceptional cost to the Profit & Loss in the year.

 

The impact on the balance sheet was the creation of a merger reserve of £356k to account for the share exchange and a deduction from the share premium account of £683k for the transaction costs.

 

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.

 

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.

 

3.            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. This has been determined by the chief operating decision maker, the Board of Directors.

 

The Group operates in three geographical areas: EMEA, the Americas and APAC. 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:

 






Unaudited

 Six months

Ended

 30 Apr 2017

Unaudited

Six months

Ended

30 Apr 2016

Audited

Year

Ended

31 Oct 2016

£'000

£'000

£'000

EMEA

5,749

3,251

6,946

Americas

APAC

3,291

310

766

-

2,698

-





Total

9,350

4,017

9,644

 

The Group currently has two key sources of revenue:

 

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

 

2.    Professional services and training - where the partner or customer requires consultancy or training on a project by project basis.

 

Revenue for each of the sources is summarised as follows:

 


Unaudited

 Six months

Ended

 30 Apr 2017

Unaudited

Six months

Ended

30 Apr 2016

Audited

Year

Ended

31 Oct 2016

£'000

£'000

£'000

Licences

8,517

3,369

8,304

Professional services and training

833

648

1,340





Total

9,350

4,017

9,644

 

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. No customers accounted for 10% or more of the recognised revenues.

 

4.            Trade and other receivables




Unaudited

Six months

Ended

30 April 2017

£'000

Unaudited

Six months

Ended

30 April 2016

£'000

Audited

Year Ended

31 October

2016

£'000

Trade receivables


8,806

2,335

5,251

Less; provision for impairment of trade receivables


-

(235)

(320)

Trade receivable net


8,806

2,100

4,931

Prepayments 


711

482

654

Total



9,517

2,582

5,585

 

The legal dispute with one of the Group's customers, previously provided for, was settled in favour of Blue Prism during the period and the customer has now agreed a new three year contract with the Group. This has been included as a contract renewal in revenues. All legal costs, which were contingent, have been included in administration costs.

 

5.            Trade and other payables 

 




Unaudited

 Six months

Ended

 30 April 2017

£'000

Unaudited

Six months

Ended

30 April 2016

£'000

Audited

 Year Ended

31 October

 2016

£'000

Trade payables


382

353

574

Other taxes & social security costs


506

115

619

Deferred revenue


12,458

4,620

9,079

Accruals



1,713

620

2,031

 Total



15,059

5,708

12,303

 

 

6.            Non-current liabilities                                                 

 






Unaudited

Six months

Ended

30 Apr 2017

£'000

Unaudited

  Six months

Ended

30 Apr 2016 

£'000

Audited

Year

Ended

 31 Oct 2016

£'000

Deferred revenue due after more than one year


4,001

1,277

1,358

 

               

               

7.            Basic and diluted loss per share

 






Unaudited

Six months

Ended

30 Apr 2017

£'000

Unaudited

Six months

Ended

30 Apr 2016

Restated 

£'000

Audited

Year

Ended

 31 Oct 2016

£'000

Weighted average number of shares for the purpose of

earnings per share (000)

62,231

38,633

50,487








(Loss) after tax    (£'000)




(3,106)

(1,944)

(5,318)








(Loss) per share (p)




(4.99)

(5.03)

(10.53)








 

Where the Group has incurred a loss in a year the diluted earnings per share is the same as basic earnings per share as the loss does not get diluted. 

 

Basic and diluted loss per share is calculated by dividing the loss after tax attributable to the equity holders of the Group by the weighted average number of shares in issue during the year.

 

8.            Share capital

 

Allotted and fully paid up:

 




Unaudited

 Six months

Ended

 30 Apr 2017

£'000

Unaudited

Six months

Ended

30 Apr 2016

£'000

Audited

 Year

Ended

31 Oct 2016

£'000

 

Ordinary share capital


624

622

622

Deferred shares


1,052

1,052

1,052

Balance at period end



1,676

 

1,674

1,674

 

 

Share Capital

Number of shares

Share

 capital

Share premium

restated



£'000

£'000









Shares at 31 October 2015

310,602

311

356





Issue of 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 immediately prior to IPO

463,957

464

361





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 shares

-

-

(683)





Total ordinary shares in issue at 30 April 2016 and 31 October 2016

62,210,968

622

9,194





Issue of new shares

183,186

2

141





Total ordinary shares in issue at 30 April 2017

62,394,154

624

9,335





 

Ordinary Shares are classified as equity.

 

As part of the Group restructure for the IPO, 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 and the right to a return of a maximum of £0.001 on a winding up of the company.

 

 

9.            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 which £60,303 was charged in the P&L for the six months to 30 April 2016. The cost of options issued in the twelve months to 31 October 2016 was £362,081.

    

During the six months to 30 April 2017;

-      100,431 share options were issued under the CSOP scheme

-      271,318 share options were issued under the Employee scheme

-      305,118 share options were issued under the ISO share scheme

 

Under the Black-Scholes option-pricing model the cost of the above options was £396,507 in the first year of which £74,419 has been charged in the P&L for the six months to 30 April 2017. The total charge for the six months to 30 April 2017 for share options issued to date was £416,783.

 

During the six months to 30 April 2017, 183,186 share options were exercised at 0.78p.


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