Source - LSE Regulatory
RNS Number : 4628D
Maestrano Group PLC
19 February 2020
 

19 February 2020

 

 

Maestrano Group PLC ("Maestrano" or the "Company" or the "Group")

 

Interim Accounts and Trading Update

 

 

 

Maestrano Group PLC (AIM: MNO), the Artificial Intelligence platform for transport corridor analytics, announces unaudited results for the six months ending 31 December 2019.

 

 

GBP 000's

Six months to December 2018    

Six months to December 2019

% Change

% Change

constant currency

Total revenue

444

319

-28%

-27%

Cost of sales

158

103

-35%

-34%

Total expenses

1,958

934

-53%

-52%

Other income

376

339

- 9%

 -6%

EBITDA

-1,296

-380

71%

57%

 

*Constant currency reflects the results had the underlying transactional currencies, (i.e. USD, AUD and GBP) remained constant across the full financial year.

 

 

Key Financial Highlights

 

·     Total revenue down 28% in reported currency and 27% at constant currency.  This decline reflects the ending of the contract with a major US bank.  Revenue contribution from the Airsight acquisition commenced 1 November 2019.

·     Total expenses decreased by 53% (52% at constant currency) as the Company decreased headcount and other overheads following the ending of the contract with a major US bank.

·     Underlying EBITDA before unusual one-off items was a loss of £380K, a 71% improvement driven by the changes in resources noted above.

·     Cash balance at 31/12/19 was £1,947,940, Net Assets £2,955,869.

 

 

 

 

 

Review of operations by the Chief Executive Officer

31 December 2019

 

Maestrano Group Plc ("the Group") provided a Master Data Management Platform that enabled medium to large enterprises to offer a differentiated service to their SMB customers, and until November 2019 had generated the majority of our revenue from one large US bank customer.  That contract ended during the half year ended 31 December 2019, and accordingly no further revenue will be generated. 

 

After evaluating other acquisition opportunities, the Company decided to acquire Airsight Holdings Pty and following a shareholder vote subsequently completed the acquisition on 31 October 2019.  The Group now offers a patented cloud-based platform for master data management and business analytics, together with specialist hardware and software for capturing, analysing and reporting on large datasets within the transport and infrastructure sectors, employing sophisticated artificial intelligence algorithms.

 

Overview of results

We have been able to make good progress throughout the subsequent period integrating operations and preparing a new operating model.  The Company achieved a significant new contract in November 2019, and also was able to announce two further major contracts wins immediately following the end of the period to end 31 December 2019. 

Revenue for the half year comprised the final revenues emanating from the major US bank customers together with the first two months of revenues contribute from the Airsight businesses:

 

 

Six Months to

Six Months to

 

 

 

31 December 2019

31 December 2018

 

Change

 

£ '000

£ '000

 

 

Enterprise implementation

196

405

 

-52%

Enterprise subscriber

4

39

 

-91%

Airsight revenues (November & December only)

119

0

 

 

Total Revenue

319

444

 

-28%

 

Underlying EBITDA for the period was a loss of £0.30 million.

 

Ongoing operations

The Company now operates from offices in Newcastle, New South Wales in Australia, has staff in the UK, and currently has customers in Australia, New Zealand, Japan and other Asian countries. The company has reduced headcount and expenses to conserve cash and is investing in a renewed growth strategy following the Airsight acquisition.  As of 31 December 2019, the Company had cash and receivables totalling £2.07m.

 

 

 

Outlook

The Company has spent significant time integrating operations and preparing for future opportunities and is now looking forward to progressing these in 2020 and beyond.   Although the Company is not currently generating revenues from its banking, accounting and distribution verticals, it is looking at a number of options to rebuild its activities in these segments.  In addition, the Airsight business gives the Company new technologies and new markets in infrastructure and transportation. The staff are energised by the progress currently being made and the prospects for growth in the future.

 

 

_________________________

Andrew Pearson

Chief Executive Officer

19 February 2020

 

 

 

 

 

 

 

Maestrano Group plc

Review of operations by the Audit Committee Chair

31 December 2019

 

As noted above this period has been focused on integrating the acquired business and preparing an operating model for ongoing operations.

A summary of the Group's results are as follows:

 

Six Months to

Six Months to

 

 

 

31 December 2019

31 December 2018

 

Change

 

£ '000

£ '000

 

 

Enterprise implementation

196

405

 

-52%

Enterprise subscriber

4

39

 

-91%

Airsight (from 1 November)

119

0

 

 

Total Revenue

319

444

 

-28%

 

 

 

 

 

Direct Cost of sale

103

158

 

-35%

Gross Margin

216

286

 

-24%

 

 

 

 

 

Employee expenses

445

1,399

 

-68%

Occupancy expenses

107

118

 

-9%

Professional Fees

286

290

 

-1%

Other operational expenses

96

151

 

-36%

Total expenses

934

1,958

 

-53%

 

 

 

 

 

Other income

338

370

 

-9%

Interest income

1

6

 

-91%

 

 

 

 

 

EBITDA (earnings before interest expenses, taxation, depreciation and amortisation adjusted for other one-off items

(380)

(1,296)

 

71%

 

 

 

 

 

Depreciation

4

7

 

-43%

Finance Costs

1

0

 

 

Other non-operating costs

 

0

 

 

Loss before income tax expenses

(385)

(1,303)

 

70%

Income tax

 

0

 

 

Loss after income tax expense

(385)

(1,303)

 

70%

 

 

Revenue

Total revenue for the period decreased by 28% to £0.32 million.  The reduction of revenue following completion of implementation projects has been compensated by revenue from activities by Airsight Holdings for the two months since acquisition.

 

Operating expenses

Overall operating, restructuring, and acquisition expenses decreased by £1.03 million compared to the previous corresponding period ("pcp") primarily as a result of decreases in staff costs and property rent.  Staff expenses decreased £0.95 million to £0.45 million as the Group reduced its Maestrano staffing and offset by the inclusion of Airsight staff from November 2019.

 

Other income derived from government research and development grants received in the period decreased slightly to £0.34 million compared to £0.37 million in the pcp. This income is primarily received in the first-half of each financial year.

 

Underlying EBITDA for the period was a loss of £0.30 million due to the reduced costs noted above.

 

Finance and other non-operating expenditure were immaterial for the period.

 

The loss after tax for the period was £0.38 million an improvement of 71% compared to pcp.

 

Balance sheet, cash and working capital

The Group balance sheet remained strong with cash resources of £1.95 million as at 31 December 2019. Cash outflow from operating activities was £0.27 million.

 

The operating cash flow was negatively impacted by the trading for the period as well as a decrease in Maestrano liabilities (payment of Trade and other payables).

 

Underlying basis of EBITDA

The Group manages its operations by looking at the underlying EBITDA which excludes the impact of a number of one-off and non-cash items as this, in the Board's opinion, provides a more representative measure of the Group's performance. A reconciliation between the reported loss before tax and underlying EBITDA is included at note 6 to the financial statements.

 

 

Jonathan Macleod

Chair of Board Audit Committee

19 February 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maestrano Group plc

Consolidated statements of profit and loss and other comprehensive income

For the period ended 31 December 2019

 

 

Unaudited six months

 Audited year

 

 

ended 31 December

 ended 30 June

 

Note

2019

2018

   2019

 

 

£

£

£

Revenue from contracts with customers

4

199,475

444,046

905,400

Airsight (from 1 November)

 

119,292

-

 

Total Revenue

 

318,767

444,046

905,400

 

 

 

 

 

Direct Cost of sale

 

(102,669)

(158,030)

(376,637)

Gross Margin

 

216,099

286,017

528,763

 

 

 

 

 

Employee expenses

 

(445,375)

(1,398,655)

(2,510,810)

Occupancy expenses

 

(107,090)

(118,485)

(235,721)

Professional Fees

 

(285,979)

(290,057)

(534,768)

Other operational expenses

 

(96,068)

(150,788)

(346,765)

Total expenses

 

(934,513)

(1,957,985)

(3,628,064)

 

 

 

 

 

Other income

5

337,798

370,190

413,649

Interest income

 

553

5,656

29,286

 

 

 

 

 

Underlying EBITDA (earnings before interest expenses, taxation, depreciation and amortisation adjusted for other one-off items

 

(380,063)

(1,296,122)

(2,656,366)

 

 

 

 

 

Depreciation

 

(4,016)

(6,544)

(35,056)

Finance Costs

 

(564)

0

0

Other non-operating costs

 

0

0

0

Loss before income tax expenses

 

(384,643)

(1,302,666)

(2,691,422)

Income tax

 

 

0

0

Loss after income tax expense for the period

 

(384,643)

(1,302,666)

(2,691,422)

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

Foreign currency translation

 

(13,659)

(12,723)

(11,668)

 

 

 

 

 

Total comprehensive income for the period

 

(398,302)

(1,315,389)

(2,703,090)

 

 

 

 

 

Loss for the period attributable to:

 

 

 

 

Non-controlling interest

 

0

0

 

Owners of Maestrano Group plc

 

(384,643)

(1,302,666)

(2,679,754)

 

 

(384,643)

(1,302,666)

(2,679,754)

 

 

 

 

 

Total comprehensive income for the period is attributable to:

 

 

 

 

Non-controlling interest

 

0

0

0

Owners of Maestrano Group plc

 

(398,302)

(1,315,389)

(2,691,422)

 

 

(398,302)

(1,315,389)

(2,691,422)

 

 

 

 

 

Basic earnings per share (pence per share)

15

(0.26)

(1.63)

(3.35)

Diluted earnings per share (pence per share)

15

(0.26)

(1.63)

(3.35)

 

 

 

The above consolidated statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

 

 

 

Maestrano Group plc

Consolidated balance sheet as at 31 December 2019

 

 

Unaudited

Audited

 

 

 December 31

 June 30

 

Note

2019

2018

2019

Assets

 

£

£

£

Non-current assets

 

 

 

 

Intangibles

 

1,049,272

8,496

0

Lease Assets

 

202,538

 

 

Property, plant & equipment

 

49,600

33,589

12,961

Total non-current assets

 

1,301,411

42,085

12,961

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

7

116,974

172,964

492,785

Contract assets

 

0

134,841

0

Other

8

47,589

144,310

61,873

Cash and cash equivalents

 

1,947,940

3,764,770

2,247,201

Total current assets

 

2,112,503

4,216,885

2,801,859

 

 

 

 

 

Total Assets

 

3,413,913

4,258,970

2,814,820

 

 

 

 

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

9

101,873

300,163

259,336

Contract liabilities

 

 

3,797

0

Lease Liabilities

 

202,538

 

 

Borrowings

 

31,059

0

0

Employee benefits

 

122,574

82,134

65,275

Income Tax

 

0

0

 

Total current liabilities

 

458,045

386,094

324,611

 

 

 

 

 

Net assets/(liabilities)

 

2,955,869

3,872,876

2,490,209

 

 

 

 

 

Equity

 

 

 

 

Share Capital

 

1,460,853

800,403

800,403

Share premium account

 

7,781,194

7,583,057

7,583,057

Other reserves

10

2,156,240

2,170,102

2,164,523

Accumulated losses

 

(8,442,418)

(6,680,686)

(8,057,774)

Equity/(deficiency) attributable to the owners of Maestrano Group plc

 

2,955,869

3,872,876

2,490,209

Non-controlling interest

 

0

0

0

 

 

 

 

 

Total equity/(deficiency)

 

2,955,869

3,872,876

2,490,207

 

 

 

 

The above consolidated balance sheet should be read in conjunction with the accompanying notes

 

 

 

 

The interim financial statements of Maestrano Group plc (company number 1109701 (England and Wales)) were approved by the Board of Directors and authorised for issue on 19 February 2020.  They were signed on its behalf by:

                                                                       

 

 

Ian Buddery                                                                             Jonathan Macleod

Chairman                                                                                             Director

 

19 February 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maestrano Group plc

Consolidated statements of changes in equity

For the period ended 31 December 2019

 

 

 

 

 

 

 

 

 

 

Share

Share

Other

Accumulated

Non

Total

Unaudited six months ended

Capital

premium

reserves

Losses

Controlling

deficiency

 31 December 2018

 

account*

 

 

Interest**

in equity

 

£

£

£

£

£

£

Balance at 1 July 2018

800,403

7,583,057

2,176,191

(5,378,020)

0

5,181,631

 

 

 

 

 

 

 

Loss after income tax expense for the period

 

 

 

(1,302,666)

0

(1,302,666)

Other comprehensive income for the period, net of tax

 

 

(12,723)

 

 

(12,723)

 

 

 

 

 

 

 

Total comprehensive income for the period

0

0

(12,723)

(1,302,666)

0

(1,315,389)

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

Share-based payments (note 16)

 

 

6,634

 

 

6,634

 

 

 

 

 

 

 

Balance at 31 December 2018

800,403

7,583,057

2,170,102

(6,680,686)

0

3,872,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share

Share

Other

Accumulated

Non

Total

Unaudited six months ended

Capital

premium

reserves

Losses

Controlling

deficiency

 31 December 2019

 

account*

 

 

Interest**

in equity

 

£

£

£

£

£

£

Balance at 1 July 2019

800,403

7,583,057

2,164,523

(8,057,774)

0

2,490,209

 

 

 

 

 

 

 

Loss after income tax expense for the period

 

 

 

(384,643)

0

(384,643)

Other comprehensive income for the period, net of tax

 

 

(13,659)

 

 

(13,659)

 

 

 

 

 

 

 

Total comprehensive income for the period

0

0

(13,659)

(384,643)

0

(398,302)

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

Acquisition Airsight Holdings

660,450

198,135

0

 

 

858,585

Share-based payments (note 16)

 

 

5,411

 

 

5,411

 

 

 

 

 

 

 

Balance at 31 December 2019

1,460,853

7,781,192

2,156,275

(8,442,417)

0

2,955,869

 

 

 

 

 

 

 

 

 

 

 

 

Share

Share

Other

Accumulated

Non

Total

 

 

Audited year ended

Capital

premium

reserves

Losses

Controlling

deficiency

 

 

 30 June 2019

 

account*

 

 

Interest

in equity

 

 

 

      £

       £

      £

          £

        £

        £

 

 

Balance at 1 July 2018

800,403

7,583,057

2,176,191

(5,378,020)

0

5,181,631

 

 

 

 

 

 

 

 

 

 

 

Loss after income tax expense for the period

 

 

 

(2,679,754)

0

(2,679,754)

 

 

Other comprehensive income for the period, net of tax

 

 

(11,668)

 

 

(11,668)

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

0

0

(11,668)

(2,679,754)

0

(2,691,422)

 

 

 

 

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

 

 

Share-based payments (note 16)

 

 

0

 

 

0

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 June 2019

800,403

7,583,057

2,164,523

(8,057,774)

0

2,490,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*    The share premium account is used to recognise the difference between the issued share capital at nominal value and the capital received, net of transaction costs

 

 

 

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maestrano Group plc

Consolidated statements of cash flows

For the period ended 31 December 2019

 

 

 

 

 

 

 

 

Unaudited six months

Audited year

 

 

ended December 31

ended  June 30

 

 

2019

2018

2019

 

 

£

£

£

Cash flows from operating activities

 

 

 

 

Loss before income tax expense for the period

 

(384,643)

(1,302,666)

(2,679,754)

 

 

 

 

 

Adjustments for:

 

 

 

 

Depreciation and amortisation

 

4,016

6,544

35,056

Share-based payments

 

5,411

6,634

0

Foreign exchange differences

 

 

(10,102)

(10,958)

Interest received

 

(553)

(5,656)

(29,286)

Interest unwind on convertible note

 

 

 

 

Interest and other finance costs

 

 

 

 

 

 

(375,769)

(1,305,246)

(2,684,942)

 

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

Decrease/(increase) in trade and other receivables

 

427,729

(22,558)

(342,379)

Decrease/(increase) in contract assets

 

0

(65,886)

68,955

Increase/(decrease  in lease assets)

 

(202,538)

 

 

Decrease/(increase) in other operating assets

 

40,073

(35,240)

47,196

(Decrease)/Increase in trade and other payables

 

(419,559)

50,784

9,956

Decrease/(increase) in contract liabilities

 

0

(24,007)

(27,804)

Increase/(decrease) in lease liabilities

 

202,538

 

 

Increase (decrease) in employee benefits

 

57,299

(9,935)

(26,794)

 

 

(270,227)

(1,412,088)

(2,955,812)

Interest Received

 

553

5,656

29,286

Interest and other finance costs paid

 

 

0

0

Income taxes paid

 

0

(30,612)

(30,612)

 

 

Net cash used in operating activities

 

(269,674)

(1,437,044)

(2,957,138)

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Payments for property, plant and equipment

 

(12,684)

(31,815)

(29,337)

 

 

 

 

 

Net cash used in investing activities

 

(12,684)

(31,815)

(29,337)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from sale of shares

 

 

0

0

Repayment lease arrangements

 

(16,903)

 

 

 

 

 

 

 

Net cash from financing activities

 

(16,903)

0

0

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

(299,261)

(1,468,859)

(2,986,475)

Cash and cash equivalents at the beginning of the financial period

2,247,201

5,236,040

5,236,040

Effects of exchange rate changes on cash and cash equivalents

 

(2,411)

(2,364)

Cash and cash equivalents at the end of the financial period

 

1,947,940

3,764,770

2,247,201

 

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes

 

Maestrano Group plc

Notes to the consolidated financial statements

For the period ended 31 December 2019

 

Note 1. General information

 

The financial statements cover Maestrano Group plc ('Company') as a consolidated entity consisting of Maestrano Group plc and the entities it controlled at the end of, or during, the period (referred to as the 'Group'). The financial statements are presented in Pound Sterling, which is Maestrano Group plc's functional and presentation currency.

 

The Company was incorporated on 6 December 2017 as a private company, Maestrano Group Limited. On 11 May 2018, the Company converted to a public company, Maestrano Group plc and on 30 May 2018 was admitted onto the Alternative Investment Market ('AIM'). On 19 April 2018, as part of a group reorganisation, the Company acquired 100% of the ordinary shares of Maestrano Pty Ltd from the existing shareholders and became the immediate and ultimate parent of the Group.  On 31 October 2019, Maestrano Group plc acquired 100% of the shares in Airsight Holdings Pty Limited, an Australian based company.

 

Maestrano Group plc is a listed public company limited by shares, incorporated and domiciled in England and Wales. Its registered office and principal place of business are:

 

Registered office                                            Principal place of business

10 John Street                                                             2/2 Frost Drive

London WC1N 2EB                                          Mayfield West NSW 2304

United Kingdom                                                          Australia

 

A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 19 February 2020. The directors have the power to amend and reissue the financial statements.

 

Note 2. Significant accounting policies

These financial statements for the interim half-year reporting period ended 31 December 2019 have been prepared in accordance with International Accounting Standards IAS 34 'Interim Financial Reporting'.

 

These interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2019 and any public announcements made by the Company during the interim reporting period.

 

New or amended Accounting Standards and Interpretations adopted

The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board that are mandatory for the current reporting period.   Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

 

 

The following Accounting Standards and Interpretations are most relevant to the Group:

 

IFRS 9 Financial Instruments

The Group has adopted IFRS 9 from 1 July 2018. The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available.

 

IFRS 15 Revenue from Contracts with Customers

The Group has adopted IFRS 15 from 1 July 2018. The standard provides a single comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with customers are presented in an entity's balance sheet as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and amortised over the contract period.

 

Impact of adoption

IFRS 9 and IFRS 15 were adopted using the full retrospective approach. The impact of adoption on opening accumulated losses as at the transition date of 1 July 2017 was £nil. There has been no material impact on adoption of IFRS 9 and IFRS 15, other than the changes to disclosure as required by these standards, which includes:

 ● reclassifying accrued revenue as contingent assets;

 ● reclassifying deferred revenue as contingent liabilities; and

● showing interest income on the face of profit or loss.

 

IFRS 16 Leases

 

IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities

for all leases, together with options to exclude leases where the lease term is 12 months or less, or

where the underlying asset is of low value.

 

(a) Transition Method and Practical Expedients Utilised

 

The Group adopted IFRS 16 using the modified retrospective approach, with recognition of

transitional adjustments on the date of initial application (1 July 2019), without restatement

of comparative figures.

 

IFRS 16 provides for certain optional practical expedients, including those related to the initial

adoption of the standard. The Group applied the following practical expedients when applying IFRS

16 to leases previously classified as operating leases under IAS 17:

• Apply a single discount rate to a portfolio of leases with reasonably similar characteristics;

• Exclude initial direct costs from the measurement of right-of-use assets at the date of initial

application for leases where the right-of-use asset was determined as if IFRS 16 had been

applied since the commencement date;

• Reliance on previous assessments on whether leases are onerous as opposed to preparing an

impairment review under IAS 36 as at the date of initial application; and

• Applied the exemption not to recognise right-of-use assets and liabilities for leases with less

than 12 months of lease term remaining as of the date of initial application.

As a lessee, the Group previously classified leases as operating or finance leases based on its

assessment of whether the lease transferred substantially all of the risks and rewards of ownership.

 

Under IFRS 16, the Group recognizes right-of-use assets and lease liabilities for most leases.

However, the Group has elected not to recognise right-of-use assets and lease liabilities for some

leases of low value assets based on the value of the underlying asset when new or for short-term

leases with a lease term of 12 months or less.

 

On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to

leases of office space, heavy equipment and automobiles, which had previously been classified as

operating leases.

 

The lease liabilities were measured at the present value of the remaining lease payments, discounted

using the Group's incremental borrowing rate as at 1 July 2019. The Group's incremental

borrowing rate is the rate at which a similar borrowing could be obtained from an independent

creditor under comparable terms and conditions.

 

The right-of-use assets were measured as follows:

(a) Office space: Right-of-use assets are measured at an amount equal to the lease liability,

adjusted by the amount of any prepaid or accrued lease payments.

(b) All other leases: the carrying value that would have resulted from IFRS 16 being applied

from the commencement date of the leases, subject to the practical expedients noted

above.

 

The following table presents the impact of adopting IFRS 16 on the statement of financial position

as at 31 December 2019 relating to Airsight leases:

 

Right-of-use assets GBP 202,538

Deferred tax assets 0

Lease liabilities (202,538)

Net reduction in retained earnings 0

 

(b) Significant Accounting Policies subsequent to Transition

 

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

• Leases of low value assets; and

• Leases with a term of 12 months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor

over the lease term, with the discount rate determined by reference to the rate inherent in the

lease unless (as is typically the case) this is not readily determinable, in which case the group's

incremental borrowing rate on commencement of the lease is used. Variable lease payments are

only included in the measurement of the lease liability if they depend on an index or rate. In such

cases, the initial measurement of the lease liability assumes the variable element will remain

unchanged throughout the lease term. Other variable lease payments are expensed in the period to

which they relate.

 

On initial recognition, the carrying value of the lease liability also includes:

• amounts expected to be payable under any residual value guarantee;

• the exercise price of any purchase option granted in favour of the group if it is reasonable

certain to assess that option;

• any penalties payable for terminating the lease, if the term of the lease has been estimated on

the basis of termination option being exercised.

 

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease

incentives received, and increased for:

• lease payments made at or before commencement of the lease;

• initial direct costs incurred; and

• the amount of any provision recognised where the group is contractually required to

dismantle, remove or restore the leased asset.

 

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.

 

Lease liabilities are remeasured when there is a change in future lease payments arising from a change in an index or rate or when there is a change in the assessment of the term of any lease.

 

Going concern

The financial statements have been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future. In assessing whether the going concern assumption is appropriate, the directors have considered the Group's existing working capital and are of the opinion that the Group has adequate resources to undertake its planned program of activities for the 12 months from the date of approval of these financial statements. Further details of the directors' considerations in relation to going concern are included in the directors' report.

 

 

Note 3. Operating segments

Identification of reportable operating segments

The Group operates in one segment being provision of data integration and analytic services. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.

 

The operating segment information is the same information as provided throughout the consolidated financial statements and are therefore not duplicated.

 

Note 4. Revenue from contracts with customers

 

 

Unaudited six months

Audited year

 

ended December 31

ended June30

 

2019

2018

2019

 

 

 

 

Enterprise implementation

£                 195,919

£                309,129

£              851,699

Enterprise subscriber & services

3,556

134,917

53,701

Airsight Holdings

119,292

 

 

 

 

 

 

Revenue from contracts with customers

318,767

444,046

905,400

 

 

 

 

 

 

Disaggregation of revenue

 

 

 

 

 

The disaggregation of revenue from contracts with customers is  as follows:

 

 

 

 

 

Unaudited six months

Audited year

 

 

 

ended December 31

ended  June 30

 

 

Geographical regions

2019

2018

2019

 

 

 

£

£

£

 

 

United Kingdom

                              -  

                             -  

                           -  

 

 

Australia

                   318,767

                  181,055

                325,174

 

 

United States of America

                              -  

                  261,472

                578,707

 

 

Middle East and Africa

                              -  

                      1,519

                     1,519

 

 

 

 

 

 

 

 

 

                   318,767

                  444,046

                905,400

 

 

 

 

 

 

 

Enterprise implementation and enterprise subscriber income are recognised as revenue over time as

opposed to a point in time.  Airsight revenue is recognised when work has been completed

 

and invoiced.

 

 

 

 

                   

 

Note 5.  Other income

Unaudited six months

Audited year

 

ended December 31

ended  June 30

 

2019

2018

2019

 

£

£

£

Government grants and rebates

337,798

370,190

425,317

 

 

 

 

 

 

 

 

 

337,798

370,190

425,317

 

Government grants and rebates predominantly relates to research and development rebates.

 

Note 6.  EBITDA reconciliation (earnings before interest expense, taxation, depreciation and amortisation)

 

Unaudited six months

Audited year

 

ended December 31

ended  June 30

 

2019

2018

2019

EBITDA reconciliation

              £

                £

                   £

Loss before income tax

(380,643)

(1,302,666)

(2,679,754)

Add: Interest expense

564

0

0

Add: Depreciation and amortisation

4,016

6,544

35,056

 

 

 

 

EBITDA

(384,643)

(1,296,122)

(2,644,698)

 

 

 

        Unaudited six months

Audited year

 

            ended December 31

ended June 30

 

2019

2018

2019

Underlying EBITDA reconciliation

£

£

£

EBITDA

(384,643)

(1,296,122)

(2,644,698)

IPO

0

0

73,063

Restructuring costs and Enterprise Investment Scheme set-up costs; acquisition costs

84,990

0

 

 

 

 

 

Underlying EBITDA

(299,653)

(1,296,122)

(2,571,635)

 

 

 

 

The financial statements include both the statutory financial statements and additional performance measures of EBITDA and Underlying EBITDA.  The directors believe these additional measures provide useful information on the underlying trend in operational performance going forward without these unusual and other one-off items.

 

Note 7.  Current assets - trade and other receivables

Unaudited six months

Audited year

 

ended December 31

ended June 30

 

2019

£

2018

£

2019

£

Trade receivables

116,974

131,714

479,355

Other receivables

0

41,250

13,430

 

116,974

172,964

492,785

 

Note 8.  Current assets - other

              Unaudited six months

Audited year

 

 

                  ended December 31

ended  June 30

 

 

                    2019

2018

2019

 

 

          £

£

£

 

Prepayments

            14,865

71,512

61,873

 

Staff Loans

 

72,798

0

 

Inventory

           32,723

0

0

 

 

           47,589

144,310

61,873

 

               

 

 

Loans to former Maestrano staff (who were retrenched as a result of the change in business operations) were written off at 31.12.2019 in lieu of compensation payments.

 

 

Note 9.  Current liabilities - trade and other payables

Unaudited six months

Audited year

 

ended December 31

ended June 30

 

2019

2018

2019

 

                £

                £

               £

Trade payables

44,893

62,792

65,352

Accrued expenses

106,323

159,945

190,656

Other payables

(49,344)

77,426

3,328

 

101,873

300,163

259,336

 

 

Note 10.  Equity - other reserves

Unaudited six months

Audited year

 

ended December 31

ended June 30

 

2019

2018

2019

 

£

£

£

Foreign currency reserve

260,989

273,628

274,683

Share-based payments reserve

5,411

6,634

0

Capital reorganisation reserve

1,889,840

1,889,840

1,889,840

 

2,156,240

2,170,102

2,164,523

 

Movements in reserves

 

 

 

 

Movements in each class of reserve during the current financial period are set out below:

 

 

 

 

 

 

 

Unaudited six months ended 31 December

Foreign

Share-based

Capital

Total

 

Currency

payments

reorganisation

 

 

£

£

£

£

Balance as at 1 July 2019

274,683

-

1,889,840

2,164,523

Foreign currency translation

(13,694)

-

-

(13,694)

Share-based payment

0

5,411

-

5,411

Balance at 31 December 2019

260,989

5,411

1,889,840

2,156,240

 

 

Note 11.  Equity - dividends

 

There were no dividends paid, recommended or declared during the current or previous financial period.

 

Note 12.  Fair value measurement

 

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature.

 

The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

 

Note 13. Contingent liabilities

 

The Group had no material contingent liabilities as at 31 December 2019, 30 June 2019 and 31 December 2018.

 

Note 14. Related party transactions

 

Parent entity

The parent entity and ultimate parent entity is Maestrano Group plc. There is no ultimate controlling party.

 

Transactions with related parties

There were no transactions with related parties during the current and previous financial period.

 

 

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

 

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.

 

Note 15.  Earnings per share

Unaudited six months

Audited year

 

ended December 31

ended June 30

 

2019

2018

2019

 

£

£

£

Loss after income tax

(384,643)

(1,302,666)

(2,679,754)

Non-controlling interest

 

0

 

Loss after income tax attributable to the owners of Maestrano Group plc

(384,632)

(1,302,666)

(2,679,754)

 

 

 

 

 

Number

Number

Number

 

 

 

 

Weighted average number of ordinary shares used in calculating basic earnings per share

146,085,369

80,040,331

80,040,331

Weighted average number of ordinary shares used in calculating diluted earnings per share

146,085,369

80,040,331

80,040,331

 

 

 

 

 

 

 

Pence

Pence

Pence

 

 

 

 

Basic earnings per share

(0.26)

(1.63)

(3.35)

Diluted earnings per share

(0.26)

(1.63)

(3.35)

 

 

 

 

Options and convertible notes have not been included in the diluted earnings per share as they are anti-dilutive

 

Note 16.  Share-based payments

 

 

 

 

 

 

 

 

 

 

 

 

 

A share option plan has been established by the Group, whereby the Group may, at the discretion of the Board of Directors, 

grant options over the ordinary shares in the Company to certain key management personnel and staff of the Group.  The options

are issued for nil consideration and are granted in accordance with performance guidelines established by the Board of Directors.

 

 

 

 

 

 

 

 

All options granted previously were forfeited or cancelled by June 2019

 

 

 

 

 

 

 

 

 

 

 

 

Set out below are summaries of options granted currently under the plan:

 

 

 

 

2019

 

 

 

 

 

 

 

Grant date

Expiry date

Exercise

Balance at

 Granted

 Exercised

 Expired/

 Balance at

 

 

price

the start of

 

 

 forfeited/

 the end of

 

 

 

the period

 

 

 other

 the period

1/07/2019

30/06/2021

       £ 0.0130

            0

              5,082,222

              -  

              -  

  5,082,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the options granted during the current financial period, the valuation model inputs used to determine the fair value at the grant time, are as follows:

 

 

 

 

 

 

 

Grant Date

Expiry Date

Share price

Exercise

Expected

Dividend

Risk-free

Fair value

 

 

at grant date

Price

volatility

yield

interest rate

at grant date

 

 

 

 

 

 

 

 

1/07/2019

30/06/2021

 £ 0.0138

 £ 0.0130

100%

0

2.90%

 £    0.005

 

 

 

 

 

 

 

 

The share-based payment expense during the financial period for this plan is £ 5,411      

 

Note 17.  Events after the reporting period

 

 

 

 

 

 

 

 

No matter or circumstance has arisen since 31 December 2019 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

 

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

Enquiries:

Maestrano Group plc

Andrew Pearson, CEO                                                                                   c/o IFC

 

Grant Thornton (Nominated Adviser)

Jamie Barklem / Niall McDonald                                                                               +44 (0)20 7383 5100

 

Arden Partners (Broker)

Ruari McGirr / Ciaran Walsh                                                                     +44 (0)20 7614 5900

IFC Advisory Limited (Financial PR & IR)

Graham Herring / Zach Cohen                                                                    +44 (0)20 3934 6630

graham.herring@investor-focus.co.uk 

 

About Maestrano

 

Maestrano offers a patented cloud-based platform for master data management and business analytics, together with specialist hardware and software for capturing, analysing and reporting on large datasets within the transport sector, employing sophisticated artificial intelligence algorithms.

      Further information on the Company is available at:  www.maestrano.com


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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