Source - LSE Regulatory
RNS Number : 9018A
Skillcast Group PLC
28 September 2022
 

 

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

 

28 September 2022

 

Skillcast Group PLC

("Skillcast", the "Group" or the "Company")

 

Results for the six months ended 30 June 2022

 

Skillcast (AIM: SKL), the provider of content and technology for digital compliance transformation, is pleased to announce its unaudited results for the six months ended 30 June 2022.

 

 Highlights

 


 

6 months to 30 June 2022

(unaudited)

 (H1 22)

 

6 months to 30 June 2021

(unaudited)

(H1 21)

 

12 Months to 31 December 2021

(audited)

 

Change (H1 22 v H1 21)

Revenue


£4.5m

£3.7m

£8.4m

+20%

Gross margin (%)


69.8%

69.1%

70.5%

+0.7pps

Annualised recurring revenue (ARR)*


£6.3m

£5.0m

£5.8m

+26%

Adjusted EBITDA*


-£0.2m

+£0.6m

£1.2m

n/a

Basic (loss)/EPS (pence)


-0.16p

+0.28p

+0.47p

n/a

Dividend per share (pence)


0.168p

0.188p

0.447p


Cash in bank


£7.5m

£4.6m

£7.9m

+61%

(Cash burn) / Free cash flow


-£0.3m

+£1.3m

+£1.3m

n/a

 

·    Revenue growth of 20% (H1 21: 4%) driven by 33% increase in subscription revenues predominantly from new customers

·    ARR* increased 26% to £6.3m in the 12 months to June 2022 (June 21: £5.0m)

·    Adjusted EBITDA* of -£0.2m as IPO proceeds start to be invested with average headcount increasing 32% over the past 12 months to 95 (June 21: 72)

·    Interim dividend declared of £150,000, in line with last year as per our stated policy.  This represents 0.168 pence per share (H1 21: 0.188 pence per share)

·    Cash in bank up at £7.5m at 30 June 2022 following £3.5m IPO proceeds (30 June 2021: £4.6m)

·    Cash burn of £0.3m in H1 22 due in part to planned headcount investments for future growth.

 

Current trading and outlook

 

Trading since the period end has continued to increase on the prior year. In response to rising inflation that is impacting all businesses, we have implemented a 10% price increase from 1 June.  This has been implemented for new business immediately and for subscription renewals will feed in progressively from 1 January 2023

The strong growth in revenue that we achieved in the first half of the year was partly due to the significant increase in ARR that we signed in the latter part of last year.  Despite the challenging market conditions that currently exist we have continued to grow ARR during the first half of this year, demonstrating the strength and resilience of our proposition in the non-discretionary corporate compliance and e-learning market.  We expect this trend to continue and remain confident in achieving full year expectations.

 

Vivek Dodd, Chief Executive Officer of Skillcast, said:

 

"Skillcast enables companies to digitise and consolidate their compliance processes, thereby reducing costs, improving their employee experience and helping build more ethical, inclusive and resilient workplaces. With companies facing inflationary pressures as well as regulatory demands, the need for this compliance transformation is greater than ever.

 

"We are pleased with the 33% growth in our subscription revenue over H1 21, which raised the total revenue growth to 20% and meant that subscription revenue as a proportion of total revenue increased to 70% (H1 21: 63%).

 

"Since our IPO in December 2021, we have made substantial improvements to our content and technology products and have maintained our 4.9/5.0 customer service rating. We have successfully attracted and retained top talent in key roles.

 

"Trading in the second half of the year has started in line with our expectations, and the pipeline of new prospective customers is strong. Although the macroeconomic outlook in the UK and the EU remains uncertain, we continue to see opportunities to grow by offering cost-saving, risk-reducing compliance solutions."

 

 

 

*Further details on the calculation of adjusted EBITDA and ARR are set out in the Financial Review below

 

Enquiries:

 

Skillcast Group plc

+44 (0)20 7929 5000

Richard Amos, Chairman

Vivek Dodd, Chief Executive Officer


Richard Steele, Chief Financial Officer




Allenby Capital Limited (Nominated Adviser & Broker)

+44 (0)20 3328 5656

James Reeve, Piers Shimwell (Corporate Finance)


Jos Pinnington, Tony Quirke (Sales and broking)


 




Strategic and operational progress

Skillcast operates in a $10 billion market for governance, risk and compliance software. Corporate compliance is undergoing a structural shift as companies digitise staff training and other compliance processes. Skillcast is helping companies of all sizes and business sectors to digitise and consolidate their workflows. Our Skillcast Portal streamlines their user and administrator experience and consolidates all their data in one place, thereby reducing the risk of violations whilst reducing their costs.

Our subscription products include course libraries, a learning management system, a policy hub, staff declarations and surveys, online compliance registers, a register for recording offline activities and continuing professional development ("CPD"). Our products integrate with several third-party HR software, digital identity platforms and collaboration apps. Unlike many of our competitors, our courses and technology are highly customisable, and we were proud to receive the platinum award for customer service from Feefo for the third year in a row in 2022.

Our strategy is to grow our recurring subscription-based revenues through a focus on supporting existing clients and acquiring similar new customers. We are very pleased with the progress we have made by growing subscription revenues by 33% in H1 22 compared to the same period in FY2021 and that ARR* at 30 June 2022 is 26% higher than at 30 June 2021. A significant part of the growth in ARR was generated in H2 21 which was in part responsible for the growth in subscription revenue in the first half this year. In the six month period to 30 June 2022, ARR grew 8% on the level at 31 December 2021. The growth in ARR over the last six months came from a combination of new client wins in H1 22 growing our active, revenue generating client base to 841 (30 June 2021: 601; 31 December 2021: 790), coupled with upsells to existing clients from both more active users and new products. An example of this is our SMCR 360 product, launched in 2021 which helps financial firms manage all aspects of compliance with the Senior Managers and Certification Regime ("SM&CR"), and which contributed its first meaningful revenues in H1 22.

Our second revenue stream is providing professional services to develop bespoke e-learning compliance courses. Our strategy is to maintain our revenues and important client relationships, and we achieved this in H1 22 with revenues of £1.4 million (H1 21: £1.4 million).

We are using the proceeds of our IPO to invest in growth. In H1 22, the average number of employees was 95, up 32% (H1 21: 72) despite the well documented talent acquisition and retention challenges in the technology sector. The largest area of headcount growth was in our sales and marketing team, which grew by 47%, primarily due to increases in the subscription sales team. Marketing activity increased with the introduction of our webinar series, as well as live, in-person events for compliance leaders that are proving hugely popular post-COVID.

We have increased the investment in both the content and technology of our products and have made good progress in H1 22 in migrating the platforms our clients use to access our products. We expect all clients to have migrated by the end of 2022.

Richard Steele joined the Group as its first full time CFO in May 2022 replacing Chris Backhouse. Following the IPO in December 2021, the Board recognised both the need and opportunity to invest further in the finance function. Richard has over 30 years experience in commercial finance roles. The Board wish to thank Chris Backhouse for his support over the past four years and in particular during the IPO process.

ESG is at the core of what we offer and stand for. Our products help our clients build a culture of respect, inclusivity, integrity and compliance with laws, regulations and standards. We also help them reduce energy consumption and CO2 emissions by digitising many activities that previously required travel. We have substantially reduced our carbon footprint due to travel, by moving to a hybrid working model and the use of virtual meetings and webinars in our sales and marketing.

Current Trading and Outlook

Trading since the period end has continued to increase on the prior year. In response to rising inflation that is impacting all businesses, we have implemented a 10% price increase from 1 June.  This has been implemented for new business immediately and for subscription renewals will feed in progressively from 1 January 2023. 

The strong growth in revenue that we achieved in the first half of the year was partly due to the significant increase in ARR that we signed in the latter part of last year.  Despite the challenging market conditions that currently exist we have continued to grow ARR during the first half of this year, demonstrating the strength and resilience of our proposition in the non-discretionary corporate compliance and e-learning market.  We expect this trend to continue and remain confident in achieving full year expectations.

 

Financial Review

Revenue

Total revenues of £4.5 million were 20% up on the comparable period last year (H1 21: £3.7 million), driven by software-as-a-service ("SaaS") subscription revenues. Subscription revenues typically accrue from 12 month contracts, invoiced up front, for our library of compliance e-learning courses and associated compliance products. During H1 22, subscription revenue growth helped grow the proportion of revenues from subscriptions to 70% (H1 21: 63%) of total revenues. Total revenues from non-financial service sectors grew 28% on the comparable period last year to account for 44% of total revenues (H1 21: 41%). Total revenue-generating clients in H1 22 increased by 40% to 841 (H1 21: 601). The top 10 clients accounted for 25% of revenues in the period (H1 21: 33%).

Subscription ("SaaS") revenues grew 33% to £3.1 million (H1 21: £2.4 million).  The growth in subscription revenues was driven by a combination of new clients and product upsells/more users. In H1 22, 84% (H1 21: 88%) of subscription revenues were derived from our core e-learning libraries and Learning Management System ("LMS"), which grew 27% on the year. We were encouraged to see a higher, 75% growth in the balance of our subscription revenues from our compliance products, increasing their mix of subscription revenues to 16% (H1 22: 12%).  For example, revenues from our Policy Hub product increased by 109% on the prior year.

Annual recurring revenue ("ARR"), our key performance indicator to measure subscription sales progress, grew by 26% to £6.3 million over the past 12 months (June 2021: £5.0 million) and by 8% since the start of the year (December 2021: £5.8 million). New sales lifted ARR by 13% from December 21, offset by a net retention rate of 95%, which included 7% churn.

Revenue from professional services was £1.4m, which was 1% below the same period last year, in line with our strategy to maintain these lower margin revenues at consistent absolute levels.

Gross profit

Gross profit margin increased by 1% to 70% in H1 22 (H1 21: 69%) as a result of the higher mix of subscription revenues which, with no bespoke work, yield typically higher margins.

Investing for growth

Adjusted overheads (which exclude IPO-related costs in the prior year of £173k) grew by £1.3 million to £3.4 million (H1 21: £2.1 million) in the period as the Group invested to drive growth as intended. The majority of this investment was in people. In H1 22 total employment costs, increased by £1.1 million or 43% to £3.5 million (H1 21: £2.4 million), and the average headcount increased 32% to 95 (H1 21: 72).  The biggest area of growth was in the sales and marketing function with an average of 8 more heads during the period.

EBITDA

As anticipated, and due to the increased investment, the Group delivered an adjusted loss in EBITDA of £0.2 million in H1 22 (H1 21: +£0.6 million).  This profit performance reflects the intended investment programme, which is supported by the fundraise in December 2021.

Tax

The Group reported a loss before tax of £285,000 in the period and consequently was not liable for any corporation tax in either its UK or Malta jurisdictions.

The Group had unutilised tax losses carried forward of approximately £0.7 million as of 31 December 2021 (2020: £0.6 million) due predominantly to research and development credits. It is expected these will increase in 2022 through trading losses and further research and development claim.  Given the varying degrees of uncertainty as to the timescale of the utilisation of these losses, the Group has not recognised the potential deferred tax assets associated with these losses.

In Malta, a withholding tax rebate of £139,983, due to Inmarkets Group Ltd with regards to dividends declared by Inmarket International Ltd for 2021, is reflected as a tax credit in H1 22.  

EPS

Following the share issue in December 2021 at the time of the IPO, no ordinary shares were issued in H1 22, and the basic loss per share was -0.162 pence on 89.5m shares. (H1 21: earnings per share +0.280 pence).  Adjusted diluted loss per share was -0.162 pence (H1 21: earnings per share +0.497 pence)

Dividend

With a business that is backed by recurring revenues that provide strong cash generation, the Board is committed to paying dividends. The Board, therefore, declared an interim dividend of £150,000 consistent with the previous year, or 0.168 pence per issued ordinary share. The interim dividend will be paid on 28 October 2022 to shareholders on the register on 7 October 2022.

It is the Board's stated policy to maintain the total aggregate annual dividend at least at £400,000, consistent with previous years, for the foreseeable future.

Balance sheet and cash flow

Net assets at 30 June 2022 were £7.2 million, in line with 31 December 2021 and £3.5 million higher than 30 June 3021 due primarily to the IPO proceeds received in December 2021.

There was a small operating cash burn in H1 22 of £0.3 million compared to a cash generation of £1.3 million in H1 21 due primarily to the reduction in profits.  This cash burn which is relatively small in comparison to the cash resources of the Group was planned as part of the growth strategy and was due in part to the investment programme we are undertaking. The Group had £7.5m cash at bank at 30 June 2022 (30 June 2021: £4.6m) and has no bank debt.

The Group does not capitalise any intellectual property on either the content or technology of its products. It has two right-of-use assets of £0.5 million at 30 June 2022, representing its leased offices in London and Malta.

Net trade receivables at 30 June 2022 of £2.5 million were £0.7 million or 41% higher than 30 June 2021. Other receivables of £1.5 million include a £1.0 million Maltese withholding tax rebate. Trade payables of £1.1 million at 30 June 2022 were in line with the previous year. Deferred income of £3.4 million at 30 June 2022 was £1.2 million or 54% higher than 30 June 2021 due to a combination of new/renewed SaaS contracts and incomplete professional services projects.

Alternative Performance Measures

*Adjusted EBITDA

The Group elected to adjust its EBITDA from continuing operations for non-recurring costs in connection with its IPO in December 2021. It also elected to adjust EBITDA by reversing the IFRS treatment of depreciation of property leases and the share-based payment charges. The Group now accepts these are both recurring items and no longer elects to adjust for them.


H1 22

H1 21

2021

2021


£'000

£'000

£'000

£'000


Unaudited

Unaudited

Re-stated

Audited






EBITDA from continuing operations

(165)

380

360

360

IPO costs

0

173

876

876

Reversal of IFRS treatment of depreciation of property lease



(198)

Share-based payment




17

Adjusted EBITDA

(165)

553

1,237

1,056

 

*Annual Recurring Revenue (ARR)

ARR is also used to assess the performance and the trend of subscription revenue. ARR is calculated by multiplying the Monthly Recurring Revenue ("MRR") by twelve. MRR is defined as the subscription revenue that was recognised in a month, excluding any retrospective upward adjustments that arise at the end of the contract where there have been more subscribers than a client originally contracted for, less any contract losses (Churn), or downward adjustments arising on contract renewal. The Directors consider that the ARR, derived from software-as-a-service (SaaS) sales, is a key measure of the performance of the business. The ARR increased 26% to £6.3 million on the year (June 21: £5.0 million) and 8% since December 2021 (£5.8 million).

 

 


Skillcast Group PLC

 



 

 


 








 

Consolidated statement of profit or loss and other comprehensive income

 











For the period ended 30 June 2022

 



















Unaudited

 

Unaudited

 

Audited



 


Six months to

 

Six months to

 

Twelve months to



 


30 June 2022

 

30 June 2021

 

31 December 2021



 

Note

£

 

£

 

£



 









Revenue

4

               4,484,085

 

               3,735,951

 

               8,408,056



 









Cost of sales


(1,352,211)


(1,156,136)


(2,476,708)












Gross profit

 

               3,131,874

 

               2,579,815

 

               5,931,348



 









Administrative expenses


(3,407,561)


(2,278,675)


(5,853,792)












Operating profit


(275,687)

 

                  301,140

 

                    77,556



 


 

 

 

 

 



EBITDA

3

(165,095)

 

                  379,929


                  360,345



 

 





 



Adjustment items

3



                  173,428


                  876,477












Adjusted EBITDA

3

(165,095)

 

                  553,357


               1,236,822



 









Other income


                              -


                      1,650


                      1,650



Finance income


                         838


                              -


                         393



Finance expense


(10,339)


(4,035)


(18,953)












(Loss)/profit before tax

 

(285,188)

 

                  298,755

 

                    60,646



 









Income tax expense


                  139,983


(74,454)


                  316,984












Total comprehensive (loss)/income

 

(145,205)

 

                  224,301

 

                  377,630



 









EPS basic

7

-0.162

 

0.280

 

0.467



EPS basic adjusted

-0.162

 

0.497

 

1.552



 












 

 

 

 

 

Skillcast Group PLC

 



 

 









Consolidated statement of financial position

 













As at 30 June 2022

 








Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2022

 

30 June 2021

 

31 December 2021

 

Note

£

 

£

 

£

Assets

 






Non-current assets

 






Property, plant and equipment


                            275,656


                           

176,840


                            276,697

Right-of-use assets


                            513,732


                          

 213,626


                            582,517

Deferred tax assets


                                  4,745


                                  5,112


                                  4,745



                            794,133


                          

 395,578


                            863,959

Current assets

 






Trade and other receivables


                        4,015,601


                   

    2,429,654


                        3,798,823

Cash and cash equivalents


                        7,453,752


                  

     4,637,801


                        7,856,126



                     11,469,353


               

        7,067,455


                     11,654,949

TOTAL ASSETS

                     12,263,486

 

              

         7,463,033

 

                     12,518,908

 







Issued capital and reserves attributable to owners

 






Share capital

5

                               89,459


                                  2,000


                               89,459

Share Option Reserve


                            108,973


                                              -


                               17,000

Share Premium Paid


                        3,490,541


                                              -


                        3,490,541

Retained earnings


                        3,479,165


                

       3,699,039


                        3,624,369



                        7,168,138


     

                  3,701,039


                        7,221,369

Liabilities

 






Current liabilities

 






Trade and other payables


                        1,098,682


        

               1,096,051


                        1,440,550

Contract liability


                        3,405,292


        

               2,233,599


                        3,037,184

Current lease liabilities


                            186,369


                               85,624


                            182,366

Income tax payable


                               16,320


                 

          234,036


                            176,134



                        4,706,662


        

               3,649,310


                        4,836,234

Non-current liabilities

 






Long-term lease liabilities


                            388,686


   

                        112,684


                            461,305



                            388,686


  

                         112,684


                            461,305

Total liabilities

 

                        5,095,348

 

   

                    3,761,994

 

                        5,297,539

TOTAL EQUITY AND LIABILITIES

                     12,263,486

 

 

                      7,463,033

 

                     12,518,908

 



 

Skillcast Group PLC

 








 

 










Consolidated statement of changes in equity

 






























Share capital

 

Share Premium Paid

 

Share Option Reserve

 

Retained earnings

 

Total equity

 

£

 

£

 

£

 

£

 

£

 










01 January 2021

                 2,000

 

                             -

 

                             -

 

      3,874,738

 

 

    3,876,738

Comprehensive Income for the period

 









Profit

                             -


                             -


                             -


           224,301


           224,301

Total comprehensive Income for the year

                             -


                             -


                             -


           224,301


           224,301











Contributions by and distributions to owners

 









Dividends

                             -


                             -


                             -


(400,000)


(400,000)

Total contributions by and distributions to owners

                             -


                             -


                             -


(400,000)


(400,000)











30 June 2021

                 2,000

 

                             -

 

                             -

 

      3,699,039

 

  

   3,701,039

 




















01 July 2021

                 2,000

 

                             -

 

                             -

 

      3,699,039

 

 

     3,701,039

Comprehensive Income for the period

 









Profit







           153,330


           153,330

Total comprehensive Income for the period

                             -


                             -


                             -


           153,330


           153,330

Total contributions by and distributions to owners

 









Capitalisation of Profit and Loss

              78,000


                             -


                             -


(78,000)


                             -

Shares issued on admission to AIM

                 9,459


      3,490,541


                             -


                             -


      3,500,000

Share Option Reserve

                             -


                             -


              17,000


                             -


              17,000

Dividends

                             -


                             -


                             -


(150,000)


(150,000)

Total contributions by and distributions to owners

              87,459


      3,490,541


              17,000


(228,000)


      3,367,000

31 December 2021

              89,459

 

      3,490,541

 

              17,000

 

      3,624,369

 

 

     7,221,369

 




















01 January 2022

              89,459

 

      3,490,541

 

              17,000

 

      3,624,369

 

 

    7,221,369

Comprehensive Income for the period

 









Profit



  

 



(145,204)


(145,204)

Total comprehensive Income for the year

                             -


                             -


                             -


(145,204)


(145,204)

Share Option Reserve



0


              91,973




              91,973

Dividends







                             -

 

                             -

Total contributions by and distributions to owners

                             -


                             -

 -

              91,973

 -

                             -

 -

              91,973


  

 

 

 

 

 

 

 

 

30 June 2022

              89,459

 

      3,490,541

 

           108,973

 

      3,479,165

 

  

   7,168,138

 













 

 

 

Skillcast Group PLC

 

 

 




 








 

Consolidated statement of cash flows

 






 








 



Unaudited

 

Unaudited

 


 



Six months to

 

Six months to

 

Audited

 

 


30 June 2022

 

30 June 2021

 

31 December 2021

 

 


£

 

£

 

£

 

Cash flows from operating activities

 






 

(Loss) / profit before tax


 

(285,188)


                            298,755


                                        60,646

 








 

Adjustments for:







 

Depreciation of property, plant and equipment


                               41,808


                               29,063


                                        84,668

 

Amortisation of right-of-use assets


                               68,785


                               49,727


                                     198,121

 

Finance income


(838)


                                              -


(393)

 

Share based payment


                               91,973


                                              -


                                        17,000

 

Finance expense


                               10,339


                                  4,035


                                        18,953

 

Sale of property, plant and equipment


                                              -


(1,650)


(1,650)

 



 

(73,121)


                            379,930


                                     377,345

 

(Increase)/ decrease in trade and other receivables


 

(216,777)


                        1,044,695


 

(324,474)

 

Increase in trade and other payables


                               26,240


                            308,525


                                 1,456,609

 

Cash generated from operations

 

 

(263,659)

 

                        1,733,150

 

                                 1,509,480

 

Income taxes paid


(19,831)


(344,532)


(10,629)

 

 

Net cash flows from operating activities

 

 

(283,490)

 

                    

  1,388,618

 

                            

 1,498,851

 

 







 

Investing activities

 






 

Purchases of property, plant and equipment


(40,767)


(87,150)


(242,612)

 

Sale of property, plant and equipment


                                              -


                                  1,650


                                           1,650

 

Interest received


                                       838


                                              -


                                                393

 

Net cash used in investing activities

 

(39,929)

 

(85,500)

 

(240,569)

 

 







 

Free cash flow

 

(323,419)

 

                       1,303,118

 

                              1,258,282

 

 







 

Financing activities

 






 

Principal paid on lease liabilities


(68,616)


(61,086)


(133,007)

 

Dividends paid


                                              -


(400,000)


(550,000)

 

Share issue


                                            -


                                         -


                   

          3,500,000

 

Interest paid on lease liabilities


(10,339)


(4,035)


(18,953)

 

Net cash (used in)/from financing activities

 

(78,955)

 

(465,121)

 

                                 2,798,040

 

 







 

Net increase in cash and cash equivalents

 

 

(402,374)


                            837,997


                                 4,056,322

 

Cash and cash equivalents at beginning of period

 

                        7,856,126


                        3,799,804


                                 3,799,804

 

Cash and cash equivalents at end of period

 

                        7,453,752

 

                        4,637,801

 

                                 7,856,126

 

 







 








 

.


 

 

Skillcast Group PLC

 




 

 









Notes to the consolidated financial statements

 













For the period ended 30 June 2022

 






















1

GENERAL INFORMATION

 















Skillcast Group PLC ('Company') is registered in the United Kingdom with registration number 12305914 and is limited by shares. Its registered office is at 80 Leadenhall Street, London, England, EC3A 3DH. The Company is the ultimate parent of Inmarkets Ltd, Inmarkets Group Ltd, Inmarkets International Ltd.


This report and financial statements reflect the consolidated activities and transactions of the Company and other group companies ('Group') and are non-statutory. It is prepared to present the mid-year trading performance and position. This report and financial statements reflect the Group after its restructuring which took place in November 2019 and which involved; the incorporation of Skillcast Group Ltd, its positioning at the head of the Group, the transfer of ownership of Inmarkets Ltd from Inmarkets Group Ltd to Skillcast Group Ltd, and the swap of the shares of Inmarkets Group Ltd with the shares of Skillcast Group Ltd. This report reflects a restructuring of the group and presents a consolidated position as if Skillcast Group PLC had been incorporated and the head of the Group since the earliest comparative presented.


Up to the 28 July 2021 the Company was a private limited company. On the 28 July 2021 the Company re-registered as a public company as Skillcast Group PLC. The Company did this in preparation of admission to the AIM market of the London Stock Exchange.  On 1 December 2021 the Company's ordinary shares were admitted in trading on AIM. On 22 July 2022 the Group published its Annual Report for the year to 31 December 2021.  This is the first interim report and financial statements since admission to AIM.


The Company is primarily involved in providing management services to other entities in the group. The Group provides software and content subscriptions and related professional services to enable companies to transform their staff compliance. Operating from its two bases, in London and Malta, the Group helps companies across a broad spectrum of industry sectors in the UK, EU and in the rest of the world, to train their staff and demonstrate compliance with various laws, regulations, and standards that are relevant for their business.


The accounting year end of the Company and Group is 31 December. This unaudited interim report and financial statements presents activities and transactions for the six months to 30 June 2022.









2

Basis of preparation and statement of compliance

 






 

 

The condensed interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2021, which have been prepared in accordance with International Accounting Standards in conformity with the Companies Act 2006. The unaudited interim financial information does not constitute statutory accounts within the meaning of the Companies Act 2006. This interim report, which has neither been audited nor reviewed by independent auditors, was approved by the board of directors on 27 September 2022

 

Statutory accounts for the year ended 31 December 2021 were approved by the Board of Directors on xx and delivered to the Registrar of Companies.

 

The Group's forecast and projections and strong cash balance support the preparation of the interim financial statements on a going concern basis under historical cost convention.

 

The interim financial statements have been presented in pounds sterling.

 

The accounting policies used in preparing the interim statements are the same as those applied to the latest audited annual financial statements.

 

 

 

3

EBITDA and adjusted EBITDA

 







EBITDA is not defined or recognised under IAS. EBITDA is defined by the Group as 'earnings before interest, tax, depreciation and amortisation'. EBITDA is presented below as 'operating profit' plus all depreciation added back.


The Group also presents 'adjusted EBITDA' as the directors believe it presents a more meaningful measure of performance. The Group incurred certain administrative expenses in anticipation of the Placing and Admission so as to deliver the anticipated growth in the business post-Admission. Had the decision to undertake the Placing and Admission not been taken by the Group, then such expenditure would not have been incurred. In calculating 'adjusted EBITDA' such 'non-recurring expenditure' has been added back to EBITDA.

 



 

 

3

EBITDA and adjusted EBITDA - Continued

 





 




Unaudited as at

 

Unaudited as at

 

Audited as at

 

 



30 June 2022

 

30 June 2021

 

31 Dec. 2021

 

 



£

 

£

 

£

 

 








 


Operating profit


(275,687)


                  301,140


                        77,556

 


Depreciation


                     110,592


                     78,789


                     282,789

 


EBITDA


(165,095)


                  379,929


                     360,345

 


Non-recurring expenditure


                                       -


                  173,428


                     876,477

 


Adjusted EBITDA


(165,095)

 

                  553,357

 

                 1,236,822

 

 








 


Due to nature of calculation of EBITDA and adjusted EBITDA the reported figures may not be comparable to other companies with similar measures.


 









 

4

Revenue

 






 




Unaudited as at

 

Unaudited as at

 

Audited as at

 

 



30 June 2022

 

30 June 2021

 

31 Dec. 2021

 

 



£

 

£

 

£

 

 

Major product lines

 






 


Software as a Service (SaaS) subscriptions (i)

                 3,117,216


             2,350,079


                 5,227,229

 


Professional services (ii)


                 1,366,869


             1,385,870


                 3,180,827

 




                 4,484,085


             3,735,949

 

                 8,408,056

 

 








 


(i)  SaaS subscriptions - The Group provides right of access of content to the customer over time for the subscription period ranging from 6 to 12 months.  The revenue recognition is deferred for the remaining period of subscription. This revenue includes subscriptions to: (a) Skillcast Portal - the Group's integrated compliance management application that comes with a broad range of tools, namely SELMS, Policy Hub, Compliance Declarations, Surveys, Compliance Registers, Training 360, Events Management and SMCR 360; and (b) the Skillcast OTS course libraries, namely Essentials, FCA Compliance, Insurance Compliance and Risk.

 


(ii)  Professional services - The Group provides customised and standard content to its clients provided under fixed-price contracts. This non-recurring revenue includes: (a) bespoke e-learning development projects for large corporates; (b) translations of those bespoke courses; (c) customisation of OTS courses for subscription clients; and (d) other content and technology consultancy.

 




Unaudited as at

 

Unaudited as at

 

Audited as at

 

 



30 June 2022

 

30 June 2021

 

31 Dec. 2021

 

 



£

 

£

 

£

 

 

Geographic split

 






 


UK


                 3,582,827


             2,935,169


                 5,716,503

 


Europe


                     577,581


                  529,508


                 1,693,379

 


Rest of world


                     323,676


                  271,272


                     998,176

 




                 4,484,083

 

             3,735,949

 

                 8,408,058

 


Non-current assets in which they are based are shown below:





 


Property, plant and equipment

 






 


UK


                     108,239


                  100,047


                     205,003

 


Malta


                        74,081


                     76,793


                        71,694

 




                     182,321


                  176,840


                     276,697

 


Right of use assets

 






 


UK


                     415,376


                     62,847


                     465,188

 


Malta


                        98,357


                  150,779


                     117,329

 




                     513,733


                  213,626


                     582,517

 

 

 








 









5

Equity - issued capital

 









Unaudited as at

 

Unaudited as at

 

Audited as at

 



30 June 2022

 

30 June 2021

 

31 Dec. 2021

 









Number


              89,459,460


          20,000,000


              89,459,460


Par value per share (GBP)


0.10p


0.01p


0.10p


Total (GBP)


                        89,459


                        2,000


                        89,459


All the shares in the Company are fully paid up. On 28 July 2021 the Company re-registered as a public company. Prior to re-registration the company's shares were reclassified as Ordinary Shares, and the company capitalised £78,000 of retained profit in order to meet the minimum capital value for these shares required of a public company. The shares were also consolidated into 1 share for every 10 in issue.  On 1 December 2021 9,459,460 additional shares were issued upon the Company's admission to the Alternative Investment Market.


Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of, and amounts paid, on the shares held. On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll, each share shall have one vote.


 

 






6

Related party transactions

 














Enterprise FD Ltd


Limited liability company registered in England and Wales.




Company registration number is 11201000.




Provides services to the Group. Chris Backhouse is both a director of Enterprise FD Ltd and a member of the key management personnel of the Group, see note 6.


Vivek Dodd


Independent Contractor located in Czech Republic.




Provided services to the Group.  Vivek Dodd is both a director and owns more than 50% of the shares in the parent company. 


Monad IKE


Limited liability company registered in Greece.




Company registration number is 153449133000



Provides services to the Group.  Morten Damsleth is both a director of Monad IKE and a member of the key management personnel of the Group.



Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2022

 

30 June 2021

 

31 Dec. 2021

 


£

 

£

 

£

 

Group expenditure with Enterprise FD Ltd

44,154


64,426


152,130


Vivek Dodd


0


48,000


72,000


Monad IKE


88,649


87,209


138,190

















 








 

7

Earnings per share

 







Earnings per share (EPS) is calculated on the basis of profit attributable to equity shareholders divided by the weighted average number of shares in issue for the year.


Diluted earnings per share have been calculated on the same basis as above, except that the weighted average number of ordinary shares that would be issued on the conversion of the dilutive potential ordinary shares as calculated using the treasury stock method (arising from the Company's share option scheme and warrants) into ordinary shares has been added to the denominator. 




Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2022

 

30 June 2021

 

31 Dec. 2021

 


£

 

£

 

£

 

Profit (Loss) before tax

 

 

(285,188)


                  298,755


                        60,646


Tax


                     139,983


(74,454)


                     316,984


Profit (Loss) after tax

 

(145,205)


                  224,301


                     377,630


Non-recurring expenditure


                                       -


                  173,428


                     876,477


Adjusted earnings

 

 

(145,205)


               397,729


                 1,254,107


Weighted average number of ordinary shares

 






Basic


           

  89,459,460


          80,000,000


              80,788,288


Effect of dilutive potential ordinary shares

                 4,445,370


 - 


                     402,500


Diluted average number of shares

            

 93,904,830


          80,000,000


              81,190,788


Earnings per share:

 







Basic


-0.162p


0.280p


0.467p


Diluted


-0.162p


0.280p


0.465p


Adjusted earnings - Basic


-0.162p


0.497p


1.552p


Adjusted earnings - Diluted


-0.162p


0.497p


1.545p


*For comparative purposes the earnings per share for 30/06/2021 as stated above have been calculated after taking into account the capitalisation of the reserves as set out in note 16 of last year's Annual Report.


Basic and diluted earnings per share of -0.162p (30/06/2021: 0.280p) has been impacted by interest, tax, depreciation, amortisation, non-core operating expenses.  Tax on adjusted earnings is the same figure as that shown on the consolidated statement of comprehensive income given that the majority of the adjusting items in the earnings per share calculation above are also adjusted for when calculating the Company's tax expense.








8

Dividends

 









Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2022

 

30 June 2021

 

31 Dec. 2021

 

Pence per

£

Pence per

£

Pence per

£

 

share

 

share

 

share

 


Dividend declared - Final 2020



0.500p

400,000

0.500p

400,000


Dividend declared - Interim 2021




0.188p

150,000


 

 







During the period under review, the Group generated a loss before tax of (£285,188).   The Group's policy is to at least maintain dividend payments.



Shareholders passed a resolution at the AGM on 22 June 2022 for a final dividend of 0.279p per share to be paid on 21 July 2021 to shareholders on the register at the close of business on 1 July 2022.  In combination with the interim dividend paid during 2021 this represented a total dividend for the year 2021 of £400,000 (2020: £400,000) or 0.447p per share based upon the number of shares currently in issue.

 

 

 

 

 

 

 

 

 

 

 

 

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