Source - LSE Regulatory
RNS Number : 7396N
Skillcast Group PLC
27 September 2023
 

 

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.

 

27 September 2023

 

Skillcast Group PLC

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

 

Results for the six months ended 30 June 2023

 

Skillcast (AIM: SKL), the provider of SaaS compliance platforms and off-the-shelf e-learning courseware, is pleased to announce strong growth in recurring subscription revenue in its unaudited results for the six months ended 30 June 2023.

 

 Highlights

 


 

6 months to 30 June 2023

(unaudited)

 (H1 23)

 

6 months to 30 June 2022

(unaudited)

(H1 22)

 

12 Months to 31 December 2022

(audited)

 

Change (H1 23 v H1 22)

Revenue


£5.2m

£4.5m

£9.8m

+15%

Gross margin (%)


66.5%

69.8%

70.1%

-3.3pps

Annualised recurring revenue (ARR)*


£8.1m

£6.4m

£6.8m

+27%

(LBITDA)/EBITDA


-£0.7m

-£0.2m

-£0.3m

-354%

Basic (loss)/EPS (pence)


-0.863p

-0.162p

-0.460p

-432%

Dividend per share (pence)


0.168p

0.168p

0.447p

0%

Cash in bank


£7.6m

£7.5m

£7.7m

+2%

(Cash burn) / Free cash flow


-£0.1m

-£0.4m

£0.3m

+80%

 

·    Revenue growth of 15% (H1 22: 20%) driven by a 23% increase in subscription revenues predominantly from new customers

Subscription revenues increased to 75% of total revenues (H1 22: 70%)

ARR* increased 27% YoY to £8.1m in June 2023 (June 22: £6.4m) and +20% year to date

·    Gross margin fell 3.3 percentage points to 66.5% (H1 22: 69.8%) due to one-off cloud transitional costs.

·    LBITDA of -£0.7m as investment continues following IPO in December 2021, with average headcount increasing 20% over the past 12 months to 114 (June 22: 95). Key growth roles now filled

·    Interim dividend declared of £150,000, in line with last year as per our stated policy.  This represents 0.168 pence per share (H1 22: 0.168 pence per share)

·    Cash in bank up at £7.6m at 30 June 2023 (30 June 2022: £7.5m) despite trading loss

·    Cash burn of only £0.1m in H1 23 with upfront cash from growing sales offsetting trading losses

 

Current Trading and Outlook

Trading since the period end continues to be encouraging, with the rate of year-on-year ARR growth accelerating to further support future subscription revenues. In the second half of the year, we look forward to complementing our existing technology offerings by launching Skillcast Basic: our low-cost, e-commerce plan for small companies.

We expect the increase in overheads to continue to slow now that we have filled all identified key management and growth roles. We plan to increase prices at the end of the year to offset continuing inflationary pressure and remain on track with our long term plans set out at the time of the IPO in 2021.

 

Vivek Dodd, Chief Executive Officer, said:

"I am delighted with the pick-up in our ARR growth, which was 20% for the first half of the year alone. We have continued to increase organically the recurring portion of our total revenues from 63% in H1 21, to 70% in H1 22, and 75% in H1 23.

 

"Our increased focus on value for money and data-led compliance is finding favour with compliance departments, and we are continuing investments in products and marketing to bring innovative solutions to market. We will shortly launch a low-cost e-commerce offer in H2 23 to help small businesses provide compliance e-learning to their staff.

 

"Trading in the second half of the year has started well, and the sales pipeline remains strong. We have declared an interim dividend in line with last year of £150,000 (0.168 pence per share) and will review our dividend policy after we have returned to profitability."

 

*Further details on the calculation of 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)


 

 

Background

Our Purpose

Skillcast enables businesses to build ethical and resilient workplaces. Our vision is to be a leading provider of compliance platform and digital training courseware for staff compliance.

Who we are

The Group is headquartered in the City of London, with an operations hub on the island of Malta. We develop content and technology to help companies with staff compliance. We have 120+ employees, many of whom have been with the Group for over a decade.

What we do

Skillcast provides time-saving and cost-effective "SaaS" (Software as a Service) solutions, including:

·    100+ off-the-shelf (OTS) e-learning courses that cover topics including Anti Money Laundering (AML); Bribery and Corruption; Diversity; Equality and Inclusion (DEI); Environmental, Social and Governance (ESG); GDPR; Health and Safety; Modern Slavery; Risk Management; and Senior Managers & Certification Regime (SMCR) for the financial services industry.

·    A feature-rich compliance platform that helps companies to digitise, automate and consolidate various staff compliance processes including training, policy attestations, declarations, disclosures, surveys, submissions and approvals.

·    Bespoke content consultancy to further personalise, adapt or gamify to meet clients' requirements.

·    Award-winning customer service to help employees obtain the optimum learning experience and provide companies with efficient and insightful learning management.

·    Free access to a host of webinars, events and SkillcastConnect community portal, which bring together compliance professionals for peer group networking.

Our customers

Over 1,000 companies use Skillcast's SaaS (Software as a Service) products consultancy services to support over 1 million employees to meet their compliance requirements. Originally targeting the financial services industry, 45% of revenues now come from other sectors, including retail, manufacturing, transport and real estate.

Investing for growth

The corporate compliance market is large, resilient, fragmented and growing, and the directors believe Skillcast is well-positioned to thrive. The Group boosted its already strong balance sheet at the time of its AIM admission in December 2021 and is investing in its products, technology, commercial teams and organisational structure.

Strategic and operational progress

Our focus in 2023, as in previous years, is on growing the subscription business measured through the size of our ARR book. We believe Skillcast has a tremendous growth opportunity as companies seek to digitise their staff compliance to reduce costs, improve employee experience and reduce the risk of breaches in the face of ever-growing regulations.

Our business model of recurring annual subscriptions provides a stable base we can build upon with product upsells and new customer acquisitions. Our investments over the past year enabled us to start 2023 with a flurry of new product launches.

Product

In February 2023, we launched our FastTrack product, which, when added to our off-the-shelf ("OTS") courses, enables experienced employees to demonstrate their compliance understanding with a pre-assessment and opt for a shorter version of the course. This improves employee acceptance of compliance training and saves staff time while ensuring full compliance.

In March 2023, we launched our Global Compliance and Global Risk courses. Compliance is generally a nationally focussed activity reflecting the rule of law. These global libraries open up the market for multinational companies, particularly in Europe, that need their courses to be based on global best practices and be available in multiple languages.

In April 2023, we launched our new micro-learning Compliance Bites: a library of short, engaging videos on key compliance topics designed to improve employee retention.

In the coming months, we will launch a new self-service plan to supply compliance training to small UK businesses. We already serve this market segment, but we believe that we can substantially increase our penetration in this underserved segment with the new service plan that will be more affordable, easy to manage and customised for industry sectors.

Technology

Migration of our application to Microsoft Azure was completed on time and budget in March 2023 and has enhanced our service's speed, reliability and security, helping us maintain our reputation as trustworthy custodians of our customers' data. It also provides the scalability we need to support future growth in the customer base.

We have invested in cyber risk prevention, implementing enhanced monitoring and protection software across our IT ecosystem. In Autumn 2023, we expect to be able to certify as Type 1 SOC 2 compliant.

We are increasing our use of AI in our products and in operational areas. We use AI to improve the efficiency of our product development in areas including coding and translations. We recently implemented an AI based sales pipeline tool and plan to implement an AI service tool for our Customer Success team in the near future.

Commercial

We continue to invest in our marketing and sales operations and are pleased with the continuing growth we are seeing in subscription revenues and ARR. We continue to attract new clients and were particularly pleased to secure two large clients with annual subscription revenues in excess of £70,000 in the period. We are seeing up sales from our new products, supporting our 104% net retention rate in H1 23.

Scalable infrastructure

We are seeing the benefits of our enhanced governance and support roles following our IPO. Our first-ever strategy day in November 2022 helped deliver our 2023 operating plan, which we monitor through a financial and OKR reporting framework.

Outlook

Trading since the period end continues to be encouraging, with the rate of year-on-year ARR growth accelerating to further support future subscription revenues. In the second half of the year, we look forward to complementing our existing technology offerings by launching Skillcast Basic: our low-cost, e-commerce plan for small companies.

We expect the increase in overheads to continue to slow now that we have filled all identified key management and growth roles. We plan to increase prices at the end of the year to offset continuing inflationary pressure and remain on track with our long term plans set out at the time of the IPO in 2021.

 

Financial Review

Revenue

Total revenues of £5.2 million were 15% up on the comparable period last year (H1 22: £4.5 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 23, subscription revenue growth helped increase the proportion of revenues from subscriptions to 75% (H1 22: 70%) of total revenues. Total revenue-generating clients in H1 23 increased by 26% to 1,059 (H1 22: 841). The top 10 clients accounted for 22% of revenues in the period (H1 22: 23%).

Subscription ("SaaS") revenues grew 23% to £3.9 million (H1 22: £3.1 million), driven by a 26% increase in new clients predominantly buying our core compliance e-learning libraries and Learning Management System ("LMS") feature on our compliance platform.  We were encouraged to see higher demand for other features on our compliance platform, such as Policy Hub growing at a faster 35% growth on H1 22 to represent 11% of subscription sales (H1 22: 10%).

Annual recurring revenue ("ARR"), our key performance indicator to measure subscription sales progress, grew by 27% to £8.1 million over the past 12 months (June 2022: £6.4 million) and by 20% since the start of the year (December 2022: £6.8 million). 83% of the ARR growth in the period was derived from new clients, including two large clients with an annual contract value of over £70,000 each. Average ARR per new account increased by 23% to £6,629 (H1 22: £5,396), and by 7% to £5,797, excluding these two large accounts. Net retention rate increased to 104% (H1 23: 95%), helped by a price rise, which contributed 4%, and reduced churn of 3% (H1 22: 7%).

Revenue from professional services was £1.3 million, which was essentially in line with the same period last year. Our strategy remains to maintain this revenue stream steady at approximately the same absolute level as in previous years.

Gross profit

Gross profit margin decreased by 3.3 percentage points to 66.5% in H1 23 (H1 22: 69.8%) as a result of the one-off transitional higher cloud computing costs incurred during the migration of all clients to Microsoft Azure, which was completed in March 2023. We have subsequently signed a new fixed contract with Azure which will start to see cost reductions in H2 23.

Investing for growth

Overheads grew by 26% or £0.9 million in the period (H1 22: 50% or £1.3 million) to £4.3 million (H1 22: £3.4 million) as the Group continued to invest to drive future growth as intended. The majority of this investment was in people.

In H1 23, total employment costs (including employees in operations included in the cost of goods sold), increased by £1.0 million or 29% to £4.4 million (H1 22: £3.4 million), and the average headcount increased by 20% to 114 (H1 22: 95). On 30 June 2023, our headcount was 121 (30 June 2022: 99). The biggest area of growth was in the sales and marketing function with an average of nine more heads during the period. Average employment costs per employee were 7% higher in H1 23 compared to H1 22.

Non-people-related overheads were £1.9 million and increased by £0.4 million or 24% on the same period last year (H1 22: £1.5 million). Marketing activity costs increased 107% compared to the same period last year. Other increases were predominantly driven by increases in revenue, headcount or inflation.

EBITDA

Due to the ongoing investment, the Group delivered an LBITDA of £0.7 million in H1 23 (H1 22: LBITDA: £0.2 million). This profit performance reflects the intended investment programme, which is supported by the fundraising in December 2021.

Tax

The Group reported a loss before tax of £0.8 million 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 £1.3 million as of 31 December 2022 (2021: £0.7 million) due predominantly to research and development credits. These will increase in 2023 due to trading losses and an expected 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 £0.1 million, due to Inmarkets Group Ltd with regards to dividends declared by Inmarkets International Ltd for 2021, was reflected as a tax credit in H1 22.  No such dividends were declared in H1 23.

EPS

The basic loss per share was 0.863 pence on 89.5 million shares. (H1 22: 0.162 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 27 October 2023 to shareholders on the register on 6 October 2023.

It is the Board's stated policy to maintain the total aggregate annual dividend of at least £400,000, consistent with previous years, for the current year. The Board will review its policy when the Company has returned to profitability.

Balance sheet and cash flow

Net assets at 30 June 2023 were £5.9 million, £0.7 million less than at 31 December 2022 and £1.3 million less than at 30 June 2022 due to the retained losses accumulated from the accelerated investments and dividends paid.

There was a small operating cash burn in H1 23 of £0.1 million (H1 22: £0.3m) as cash receipts paid upfront from higher subscription sales offset trading losses. 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 £7.6m cash at bank at 30 June 2023 (30 June 2023: £7.7m) 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 totalling £0.5 million at 30 June 2023, representing its leased offices in London and Malta.

Trade and other receivables at 30 June 2023 of £3.7 million were £0.3 million lower than 30 June 2022. Trade debtors of £2.3 million were £0.2 million lower than at 30 June 2022 despite the revenue growth and debtor days fell from 76 at 30 June 2022 to 63 days at 30 June 2023. Other receivables of £1.5 million 30 June 2023 are in line with 30 June 2022. £0.6 million of this balance relates to tax rebate due from the Maltese government. During the period £0.2 million was received.

Current liabilities of £5.8 million at 30 June 2023 were £1.1 million higher than at 30 June 2022 primarily due to an increase in contractual liabilities relating to deferred income. Deferred income of £4.2 million at 30 June 2023 was £0.8 million or 24% higher than 30 June 2022 due to SaaS contracts and incomplete professional services projects.

Alternative Performance Measures

*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 27% to £8.1 million on the year (June 22: £6.4 million) and 20% since December 2022 (£6.8 million).

 

Skillcast Group PLC

 



 

 









Consolidated statement of profit or loss and other comprehensive income

 









For the period ended 30 June 2023

 















Unaudited

 

Unaudited

 

Audited

 


Six months to

 

Six months to

 

Twelve months to

 


30 June 2023

 

30 June 2022

 

31 December 2022

 

Note

£

 

£

 

£

 







Revenue

4

                      5,150,205

 

                      4,484,085

 

                              9,830,431

 







Cost of sales


(1,722,934)


(1,352,211)


(2,942,092)








Gross  profit

 

                      3,427,271

 

                      3,131,874

 

                              6,888,339

 







Administrative expenses


(4,294,662)


(3,407,561)


(7,442,068)








Operating profit

 

(867,391)

 

(275,687)

 

(553,729)

 


 

 

 

 


EBITDA

3

(749,261)

 

(165,094)

 

(316,314)

 







Other income


                                        -


                                        -


                                      3,013

Finance income


                          106,169


                                  838


                                    15,996

Finance expense


(10,614)


(10,339)


(21,307)








Profit before tax

 

(771,836)

 

(285,188)

 

(556,027)

 







Income tax rebate


                                        -


                          139,983


                                 144,237








Profit after tax and total comprehensive income

 

(771,836)

 

(145,205)

 

(411,790)

 







EPS basic

7

-0.863p

 

-0.162p

 

-0.460p

EPS diluted

-0.863p

 

-0.162p

 

-0.460p

 



 

Skillcast Group PLC

 



 

 









Consolidated statement of financial position

 













As at 30 June 2023

 








Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2023

 

30 June 2022

 

31 December 2022

 

Note

£

 

£

 

£

Assets

 






Non-current assets

 






Property, plant and equipment


                                240,681


                   275,656


                    254,288

Right-of-use assets


                                540,268


                   513,732


                    616,024

Deferred tax assets


                                  11,999


                       4,745


                      11,999



                                792,948


                   794,133


Current assets

 






Trade and other receivables


                            3,734,275


               4,015,601


                3,330,574

Cash and cash equivalents


                            7,622,847


               7,453,752


                7,704,003



                          11,357,122


             11,469,353


TOTAL ASSETS

 

                          12,150,070

 

             12,263,486

 

              11,916,888

 







Issued capital and reserves attributable to owners

 






Share capital

5

                                  89,459


                     89,459


                      89,459

Share Option Reserve


                                291,175


                   108,973


                    223,331

Share Premium Paid


                            3,490,541


               3,490,541


                3,490,541

Retained earnings


                            2,040,860


               3,479,165


                2,812,695



                            5,912,035


               7,168,138


Liabilities

 






Current liabilities

 






Trade and other payables


                            1,433,235


               1,098,682


                1,199,370

Contract liability


                            4,229,174


               3,405,292


                3,437,764

Current lease liabilities


                                153,187


                   186,369


                    188,586

Income tax payable


                                  16,321


                     16,320


                      16,320



                            5,831,918


               4,706,662


Non-current liabilities

 






Long-term lease liabilities


                                406,118


                   388,686


                    458,822



                                406,118


                   388,686


Total liabilities

 

                            6,238,035

 

               5,095,349

 

TOTAL EQUITY AND LIABILITIES

 

                          12,150,070

 

             12,263,486

 

              11,916,888

 

Skillcast Group PLC

 








 

 










Consolidated statement of changes in equity

 






























Share capital

 

Share Premium Paid

 

Share Option Reserve

 

Retained earnings

 

Total equity

 

£

 

£

 

£

 

£

 

£

 










01 January 2022

              89,459

 

         3,490,541

 

              17,000

 

         3,624,369

 

         7,221,369

Comprehensive Income for the period

 









Profit/(Loss)



  

 



(145,204)


(145,204)

Total comprehensive Income for the year

                         -


                         -


                         -


(145,204)


(145,204)

Total contributions by and distributions to owners

 









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

 










Comprehensive Income for the period

 









Profit/(Loss)



  

 



(266,586)


(266,586)

Total comprehensive Income for the period

                         -


                         -


                         -


(266,586)


(266,586)

Total contributions by and distributions to owners

 









Share Option Reserve





            114,358




            114,358

Dividends - Prior Year







(249,592)


(249,592)

Dividends - Current Year







(150,292)


(150,292)

Total contributions by and distributions to owners

                         -


                         -


            114,358

 

(399,884)

 

(285,526)

31 December 2022

              89,459

 

         3,490,541

 

            223,331

 

         2,812,695

 

         6,616,026

 










01 January 2023

              89,459

 

         3,490,541

 

            223,331

 

         2,812,695

 

         6,616,026

Comprehensive Income for the period

 









Profit/(Loss)

 

 

 

 

 

 

(771,836)


(771,836)

Total comprehensive Income for the year

                         -


                         -


                         -


(771,836)


(771,836)

Total contributions by and distributions to owners

 









Share Option Reserve





              67,844




              67,844

Dividends

 

 

 

 

 

 

 

 

 

Total contributions by and distributions to owners

                         -


                         -


              67,844


                         -


              67,844











30 June 2023

              89,459

 

         3,490,541

 

            291,175

 

         2,040,859

 

         5,912,034



 

Skillcast Group PLC

 

 

 











Consolidated statement of cash flows

 















Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2023

 

30 June 2022

 

31 December 2022

 


£

 

£

 

£

Cash flows from operating activities

 






Profit before tax


(771,836)


(285,188)


(556,027)








Adjustments for:







Depreciation of property, plant and equipment


                        42,374


                41,808


                      88,405

Amortisation of right-of-use assets


                        75,756


                68,785


                   149,010

Finance income


(106,169)


(838)


(15,996)

Share based payment


                        67,844


                91,973


                   206,331

Finance expense


                        10,614


                10,339


                      21,307

Sale of property, plant and equipment


                                    -


                            -


                                 -



(681,417)


(73,121)


(106,970)

(Increase)/ decrease in trade and other receivables


(403,701)


(216,777)


                   468,248

Increase in trade and other payables


                   1,025,275


                26,240


                   159,399

Cash generated from operations

A

(59,843)

 

(263,659)

 

                   520,677

Income taxes paid


                                   2


(19,831)


(22,831)

Net cash flows from operating activities

 

(59,841)

 

(283,490)

 

                   497,846

 







Investing activities

 






Purchases of property, plant and equipment


(28,767)


(40,767)


(65,995)

Interest received


                      106,169


                      838


                      15,996

Net cash from/(used in) investing activities

B

                        77,402

 

(39,929)

 

(49,999)

 







Financing activities

 






Principal paid on lease liabilities

C

(88,103)


(68,616)


(178,779)

Dividends paid


                                    -


                            -


(399,884)

Interest paid on lease liabilities

D

(10,614)


(10,339)


(21,307)

Net cash (used in) financing activities

 

(98,717)

 

(78,955)

 

(599,970)

 







Net decrease in cash and cash equivalents

 

(81,156)

 

(402,374)

 

(152,123)

Cash and cash equivalents at beginning of period

 

                   7,704,003


           7,856,126


                7,856,126

Cash and cash equivalents at end of period

 

                   7,622,847

 

           7,453,752

 

                7,704,003

 














Free cash flow

A+B+C+D

(81,158)

 

(382,543)

 

                   270,592

 

 

Skillcast Group PLC

 




 

 









Notes to the consolidated financial statements













For the period ended 30 June 2023





















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 is non-statutory. It is prepared to present the mid-year trading performance and position.


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 2023.









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 2022, 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 26 September 2023.


Statutory accounts for the year ended 31 December 2022 were approved by the Board of Directors on 23 April 2023 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

 







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












Unaudited as at

 

Unaudited as at

 

Audited as at

 



30 June 2023

 

30 June 2022

 

31 December 2022

 



£

 

£

 

£

 









Operating profit


(867,391)


(275,687)


(553,729)


Depreciation


                            42,374


                                  41,808


                              88,405


Amortisation


                            75,756


                                  68,785


                            149,010


EBITDA


(749,261)


(165,094)


(316,314)










Due to nature of calculation of 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 2023

 

30 June 2022

 

31 December 2022

 



£

 

£

 

£

 

Major product lines

 







Software as a Service (SaaS) subscriptions (i)


                       3,847,301


                            3,139,216


                        6,689,710


Professional services (ii)


                       1,302,904


                            1,344,869


                        3,140,721




                       5,150,205

  

                            4,484,085

 

                        9,830,431

 









(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 2023

 

30 June 2022

 

31 December 2022

 



£

 

£

 

£

 

Geographic split

 







UK


                       4,102,369


                            3,582,827


                        7,627,351


Europe


                          599,722


                               577,581


                        1,344,694


Rest of world


                          448,114


                               323,676


                            858,386




                       5,150,205

 

                            4,484,083

 

                        9,830,431

 









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








Property, plant and equipment

 







UK


                          192,478


                               108,239


                            197,744


Malta


                            48,203


                                  74,081


                              56,544




                          240,681


                               182,321


                            254,287


Right of use assets

 







UK


                          312,800


                               415,376


                            465,188


Malta


                          227,468


                                  98,357


                            117,329




                          540,268


                               513,733


                            582,517









5

Equity - issued capital









Unaudited as at

 

Unaudited as at

 

Audited as at

 



30 June 2023

 

30 June 2022

 

31 December 2022

 









Number


                    89,459,460


                          89,459,460


                      89,459,460


Par value per share (GBP)


0.10p


0.10p


0.10p


Total (GBP)


                            89,459


                                  89,459


                              89,459










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 was both a director of Enterprise FD Ltd and was a member of the key management personnel of the Group up until he resigned 16/05/2022.


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.


Thruvision Ltd.


Limited liability company registered in England and Wales.





Company registration number is 10940081.





Client of the Group purchasing an annual subscription. Richard Amos was both a Non-Executive Director of Skillcast Group PLC. and a Director of Thruvision Group plc, the ultimate holding company of Thruvision Ltd











Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2023

 

30 June 2022

 

31 December 2022

 


£

 

£

 

£

 

Group expenditure with Enterprise FD Ltd


0


44,154


55,190


Group expenditure with Monad IKE


82,013


88,649


139,493


Group revenue with Thruvision Ltd.


2,486


0


0








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 has 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 2023

 

30 June 2022

 

31 December 2022

 


£

 

£

 

£

 

Profit (Loss) before tax

 

(771,836)


(285,188)


(556,027)


Tax


                                       -


                               139,983


                            144,237


Profit (Loss) after tax

 

(771,836)


(145,205)


(411,790)


Non-recurring expenditure


                                       -


                                            -


                                         -


Adjusted earnings

 

(771,836)


(145,205)


(411,790)


Weighted average number of ordinary shares

 







Basic


                    89,459,460


                          89,459,460


                      89,459,460


Effect of dilutive potential ordinary shares


                       4,245,657


                            4,445,370


                        3,843,507


Diluted average number of shares


                    93,705,117


                          93,904,830


                      93,302,967


Earnings per share:

 







Basic


-0.863p


-0.162p


-0.460p


Diluted


N/A


N/A


N/A


Basic and diluted earnings per share of -0.863p (30/06/2022: -0.162p) has been impacted by interest, tax, depreciation, amortisation, non-core operating expenses. 








8

Dividends

 









Unaudited as at

 

Unaudited as at

 

Audited as at

 


30 June 2023

 

30 June 2022

 

31 December 2022

 

Pence per

£

Pence per

£

Pence per

£

 

share

 

share

 

share

 


Dividend declared - Final 2021





0.279p

249,592


Dividend declared - Interim 2022





0.168p

150,292










 

 







During the period under review, the Group generated a loss before tax of (£771,836).   The Group's policy is to at least maintain dividend payments at historic levels.


The Shareholders passed a resolution at the AGM on 20 June 2023 for a final dividend of 0279p per share to be paid on 21 July 2023 to shareholders on the register at the close of business on 30 June 2023.  In combination with the interim dividend paid during 2022 this represented a total dividend for the year 2022 of £399,884 or 0.447p per share based upon the number of shares currently in issue.

 

 

 

 

 

 

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