07:00 Wed 16 Sep 2020
Eagle Eye Sol Gp PLC - Final Results

("Eagle Eye", the "Group", or the "Company")
Final Results for the year ended
Successful international expansion, significant growth in adjusted EBITDA and revenue
Eagle Eye, a leading SaaS technology company that creates digital connections enabling personalised, real-time marketing through coupons, loyalty, apps, subscriptions and gift services, is pleased to announce its results for the financial year ended
Financial Highlights
| FY20 | FY19 | Change |
Group revenue | | | +21% |
Recurring subscription and transaction revenue | | | +24% |
Recurring revenue % of Group revenue | 73% | 71% | +2ppts |
Gross margin | 94% | 93% | +1ppt |
Adjusted EBITDA* | | | +359% |
Net cash inflow / (outflow) | | |
|
Net cash / (debt)** | | |
|
Loss for the year | | | -76% |
Operational Highlights
· Continued growth of the Tier 1 customer base both in the
· Two flagship international clients won and reached go-live in the year, The Warehouse Group in
· Growing number of powerful collaborations to target the US market: dunnhumby, Ecrebo and News America Marketing
· AIR volumes grew by 140% year-on-year to 2.1bn (FY19: 0.9bn)
· Continued innovation and platform enhancements, including 30% improvement in speed and responsiveness and new analytics integrations
· Contract extensions with Sainsbury's, ASDA and
· Long term contract customer churn rate by value remained very low at 0.9% (FY19: 0.8%)
Outlook
· Positive start to FY21 despite COVID-19 with current trading in line with Board's expectations
· Board confident the Group continues to have sufficient headroom within its
Notes
* EBITDA has been adjusted for the exclusion of share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit and is reconciled to the GAAP measure of loss before tax in note 5 to the financial statements below.
** Net cash/(debt) is cash and cash equivalents less borrowings.
"The global pandemic has prompted the acceleration of digital transformation in the retail sector and never has digital engagement with consumers been of more relevance. We will continue to invest in our people, product development, sales and marketing, and in new geographies during the year ahead, whilst carefully managing the business and cost-base. This will enable us to capitalise on the accelerated digital transformation in the retail sector, as well as sustain the momentum we have gained in the US and
"With our growing number of Tier 1 clients, proven technological ability, powerful international partners and a strengthening financial position, I am confident for the future."
For further information, please contact:
|
Tel: 0844 824 3686 |
Investec (Nominated Advisor and Joint Broker) Corporate Finance: Corporate Broking:
| Tel: 020 7597 5970
|
Shore Capital (Joint Broker) | Tel: 020 7408 4090 |
Alma PR |
Tel: 020 3405 0205 |
|
|
About Eagle Eye
Eagle Eye is a leading SaaS technology company transforming marketing by creating digital connections that enable personalised performance marketing in real time through coupons, loyalty, apps, subscriptions and gift services.
Eagle Eye AIR enables the secure issuance and redemption of digital offers and rewards at scale, across multiple channels, enabling a single customer view. We create a network between merchants, brands and audiences to enable customer acquisition, interaction and retention at lower cost whilst driving marketing innovation.
The Company's current customer base comprises leading names in
Chairman's Statement
I am delighted to report on another successful Year for Eagle Eye, during what has been a challenging time for all, delivering 21% growth in revenue, a significant improvement in adjusted EBITDA to
The challenges of operating during a global pandemic have underlined the Group's resilience, agility, and ability to adapt to the new operational environment, demonstrating the benefits of the initiatives commenced in the prior year, such as the move to the Google Cloud Platform ("GCP") and our commitment to investing in line with, not ahead of, revenue growth. Our people and the AIR platform have continued to deliver for our major clients; we have won new business both domestically and internationally; and we continued to innovate, supporting the acceleration of retailers' digital engagement activities, all while carefully managing our resources. The management team demonstrated their ability to be agile in the face of a global pandemic, rapidly implementing cash management procedures and new marketing initiatives. Throughout the pandemic, great emphasis has been placed on continuous communication with clients, partners and employees and it is evident to me that the Group has emerged as a strengthened team as a result.
Of all the operational achievements in the Year, one to particularly note is the accelerated speed with which we can now take significant new clients live, as achieved with our two new international clients going live in just a few months following contract signing. This puts the Group on a strong footing to accelerate growth as new customers join the platform. Importantly, the successful go-live of these two new international customers means we now have flagship clients to act as footholds for expansion into new geographies, supported by our teams in the
The Year has also underlined the ability of the AIR platform to cater to the requirements of significant retailers, demonstrated by the platform's speed and scale of handling transaction volumes. Some of the world's largest retailers have chosen Eagle Eye because they can be assured that they have the best in class transaction platform which is needed to match their growing AI capabilities.
With a growing number of flagship customers in new geographies, I am confident in our ability to continue to grow our share of the global digital loyalty and promotions market.
Financial Results
Group revenue increased to
Summary
At this point in my review it is customary to thank the staff for their contribution in the Year. This year, more than any, I have observed their ability and agility to handle the challenges of COVID-19 in a manner which has been remarkable to witness and I thank them all for their hard work and dedication, both to the business and our customers. I would like to once again thank all our customers, partners, suppliers and shareholders for their continued support throughout the Year and I look forward to achieving further successes together in the future.
The impact of COVID-19 has accelerated change in the retail sector, prompting growth in digital engagement and ecommerce, and underlining the need for brands to build direct to consumer propositions. Eagle Eye's ability to provide services to help businesses acquire, connect with and retain customers and build on loyalty has never been more relevant.
I am incredibly proud of the business Eagle Eye has become, with metrics such as customer retention rates, recurring revenue and growth rates demonstrating the quality of the business. These factors, coupled with the size of its addressable market and growing customer base provide the Board with confidence in the ongoing resilience of Eagle Eye and its ability to capitalise on the long-term growth opportunity the digital transformation of retail marketing represents.
CEO's Statement
The COVID-19 pandemic has clearly had a marked impact on the global economy. However, our people responded with great agility and I believe we have emerged as a stronger company, successfully navigating the impact of lockdown on segments of our customer base and quickly implementing measures to protect our balance sheet and support our customers, while increasing our strength as a team. I am incredibly pleased with how we have responded and more confident than ever in our ability to thrive.
Our growing number of Tier 1 customers demonstrates our ability to deliver for enterprise level clients. We have growing proof of the performance of the AIR platform and its unique ability to deliver leading loyalty and promotions programmes for some of the largest retailers in the world. Alongside our long-standing Tier 1 customers in the
Market opportunity
The impact of the global pandemic has seen the acceleration of the shift to digital for both consumers and retailers, as demonstrated by a 28 percent increase in Global eCommerce sales in
However, according to a recent report by McKinsey* into retail behaviour, a critical component for delivering a great omnichannel experience is being able to deliver hyperlocal and personalised experiences, both in store and online. To achieve this, retailers need to be able to track a customer across all interactions, with an offer engine sitting behind each of the channels, bringing them all together. Our AIR digital marketing platform provides retailers with a better, simpler and highly efficient way to achieve genuine omnichannel personalisation by providing a consolidated view of each customer, tracking every customer interaction, connecting to the Point of
We operate in large, global markets: Promotions; Loyalty; and Gift, which benefit both from inherent growth and the ongoing conversion to digital. Examples of the level of growth forecast by industry research houses in these markets are:
· 31% growth in the total value of mobile coupons redeemed between 2020 - 2023, to
· 23.3% Compound Annual Growth Rate (CAGR) in the global loyalty management market between 2020 - 2025, to
· 13% CAGR in the global gift cards market between 2020 - 2023, to
This data illustrates that the addressable market for Eagle Eye is significant and growing and, therefore, even relatively small increases in market share would be transformational for our business.
* Retail reimagined: The new era for customer experience - Periscope by McKinsey
Delivering against all elements of our growth strategy
I am pleased to report the following progress across all four elements of our growth strategy:
1."Win, Transact and Deepen"
Our customer strategy is to:
· 'Win': bring more customers on to the Eagle Eye AIR platform;
· 'Transact': drive higher redemption and interaction volumes through the platform; and
· 'Deepen': encourage our customers to adopt more of our product portfolio as they become more adept at digital marketing.
Our high level of customer retention means that each new customer win significantly adds to our growth prospects, with revenue from our largest revenue-generating customers typically increasing by a multiple of over three times by the end of their third year on the AIR platform, through both use of the platform and the addition of new services. This trend has now been consistently exhibited by key clients for over five years.
Win
The Year saw an increased win rate, both in the
Transact
The technical strength of the AIR platform and its growing reach can be seen in the strong growth in redemptions and interactions ('AIR volumes') in the Year, growing by 140% year-on-year to 2.1bn (FY19: 0.9bn). This growth was primarily driven by growth in loyalty transactions following the successful launch of new programmes and deepening of existing accounts, but also reflecting growth in all other types of transactions.
Brands & Audiences
The AIR platform is also used by brands to run campaign activations across our growing Retailer, Operator and Audience Network. While this element of the business was impacted by the COVID-19 lockdown, overall the revenue from branded drinks campaigns grew 26% to
We have increased the attractiveness of the AIR platform to Brands through the implementation of our "Connected Campaigns" proposition, incorporating a light touch integration with an operator's Point of
The other element of our 'Transact' strategy is our Audience partners, who include affiliate networks and membership groups. During the Year, we signed several new partners and saw the addition of the first Affiliate network, Tradedoubler, which alone provides our clients with the ability to disseminate their offers and promotions far wider than ever before, to over 180,000 additional publishers.
Deepen
We saw continued growth in recurring revenues in the Year, as existing clients increased their use of the AIR platform. The key driver of this is our Tier 1 customer segment where we have seen growth from both the increased use of the platform for promotional activity and the greater take-up of new services by Tier 1 customers. The Year also saw several Tier 1 customers move from implementation to successful go-live on the AIR platform, driving a strong increase in recurring, transactional revenues.
Our long term contract customer churn rate by value remains very low at 0.9% (FY19: 0.8%) with several multi-year contract renewals taking place, including Sainsbury's, ASDA and
Supporting our clients through the COVID-19 lock-down
The Group has increased its relevance and proven its ability to rapidly innovate by launching initiatives to support our clients in the face of COVID-19. These included the launch of a Text and Trace service within hours of the
2. Innovation and the AIR platform
Innovation
One of our core values is innovation. Over the course of the Year, we have continued to enhance our AIR platform, working in collaboration with our clients to ensure that our technology continues to deliver to meet their, and their consumers', ever-changing needs.
Better data: A key focus has been on developing the platform to further strengthen our capability to deliver real-time hyper-personalisation for our clients. We have invested in building standard integrations to third party analytics providers to streamline the process from data-driven insight into digital execution.
Additional channels: We have launched our new, personalised Message At Till capability which we believe will soon have many innovative use cases associated to it, based on the different ways in which businesses will deploy the technology.
Personalised loyalty: Our clients wanted to implement new strategies to enable their consumers to personalise the way in which they could be rewarded for their loyalty. We, therefore, developed a new
ESG: We worked in collaboration with our clients to support Charity Donations, a feature which allows a customer to select from available charities to whom they can donate the value of their loyalty points. We expect this feature to develop and become more and more popular as our clients' ESG initiatives continue to come to the fore.
Coalition schemes: B2B partnerships beyond charities have also become more important to our clients, with many businesses looking to develop their own ecosystem with their loyalty currency at its heart. To support this, we have developed a new and streamlined way to facilitate partnerships in the platform, enabling scheme partners to run incentives which reward participating consumers in the scheme owners' currency, with no involvement from the scheme owner required.
AIR Platform
Underpinning the development work highlighted above, are the significant improvements we have continued to make to our underlying technology. During the Year, we drove a 30% improvement in speed and responsiveness of our platform by taking advantage of new tools and technology available to us through our partnership with
In the Year, we delivered new Point of
Our move to GCP has been completed, successfully moving all our AIR platforms in all our geographies to GCP. We have seen excellent benefits from the move and will continue to build on the tools and technologies that the move to GCP enables.
We are now live with AIR in the
Thanks to the implementation of GCP and our cloud transformation journey, we no longer need to manage hardware and datacentres as we used to and so have embraced the world of DevOps and agile platform management to run a 24/7 global operations team and via the use of tools such as New Relic, we are able to monitor and react to issues in real-time before they affect our customers.
We are upskilling our technical teams by putting employees through the
As we move into 2021, we will be implementing further changes including the introduction of site reliability engineering in order to be more scalable, automated, reliable, standardised and secure.
3. International growth
We have started to prosecute our international growth strategy in the Year, winning new customers, taking them live in significantly reduced timescales and providing us with a gateway to new territories. Our new agile methodologies have enabled us to supplement our local teams by our global resource pool, enabling us to open up these geographies in a cost-efficient and scalable manner.
We now have a small team on the ground in
US
Since the signing of a five-year contract with
Powerful collaborations
Having initially secured the contract alongside our first US partner, News America Marketing, we are now delivering this contract alongside additional delivery partners Ecrebo, the receipt marketing technology provider and dunnhumby, a global leader in customer data analytics. These three companies represent powerful, relevant relationships to optimise our expansion into the US. Combining these relationships with our own, direct marketing activities, we believe provides us with the right mix to capture more of what is the world's largest promotions and loyalty market and we are encouraged by the increasing number of opportunities entering our sales pipeline.
The Warehouse Group, one of the largest retailing groups in
Moving forward, our strategy for international expansion will continue to be centred around securing a landmark client in a new geography to spearhead expansion into that region. Where possible, we will utilise already existing resources to support new geographies, until the relevance of our offering to that market has been proven and the profitable viability of market specific investment confirmed.
4. "Better, Simpler, Cheaper"
While investing in innovation and growing the business, we simultaneously look for inherent productivity and efficiencies coming from the scale of what we do. The relevance of this ethos came to the fore at the time of the COVID-19 pandemic when the agility of the organisation enabled us to swiftly implement home working and the change of working practices required to ensure its successful execution. The proof of this can be seen both in the continued successes with our Tier 1 one customer implementations as well as the strong financials we have reported.
We have now implemented the agile methodology, not only within software development, but across the business. At the start of the Year, we introduced our concept of being a Team of Teams, to help facilitate faster decision making and swifter response to changes in our end markets. As we expand geographically this will allow the business to grow and flourish.
The business is now split between functions that form the core 'backbone' of the business, such as infrastructure and security, finance and HR, and other functions whose activity and location is assigned each quarter, depending on the business requirements at the time, such as customer wins and implementation. The benefits of this model mean that we can remain a lean organisation but are able to support customers across multiple geographies and invest in line with, rather than ahead of, revenue growth, ensuring that we are efficiently using our capital resources.
The benefits of our migration to GCP, our lead "Better, Simpler, Cheaper" initiative from 2019, can be seen in the 140% growth in transaction volumes through the platform, only resulting in a 6% increase in infrastructure costs, to
People
We have set ourselves the goal of being a great place to work and to create an environment where our people can flourish. We continue to place investment in our people at the heart of what we do, providing them with training and tools to be the best they can be.
We passionately believe that it is the values of an organisation that sets them apart. Our values of teamwork, passion, excellence, fun, integrity and innovation are summarised at Eagle Eye as being Purple behaviours. It is the Purpleness of our team that has enabled us to cope as well as we have in the face of COVID-19. Keeping values fresh and top of mind in an organisation is a full-time job and to this end this Year we have established a Values Committee to recognise and reward individuals and teams who display "Purple" behaviour.
Increased communication has been vital during the Year and we have put in place our "Tea with Teams" weekly company updates, Sales & Operations meetings to streamline the hand off between the two functions and quarterly senior leadership meetings to align and empower the senior team on the strategy of the business and enable appropriate resource allocation.
Eagle Eye has always prided itself on fostering a diverse and inclusive workplace and culture in line with its strong and clearly defined values. This Year we have encouraged employees to create Employee Resource Groups and so far we have two, one for mental health and another for racial diversity.
COVID-19
We continue to monitor the impact of COVID-19, reviewing and updating our business continuity plans accordingly. We have proven our ability to respond to the immediate changes thrust upon our clients and ourselves, but we will not be complacent. We will continue to closely monitor the health of all of our client relationships, implement strong cash management practices and invest in line with growth.
COVID-19 saw many of the Group's Food and Beverage (F&B) and non-grocery retail clients in the
Following the lifting of lockdown, we have seen a partial recovery in our F&B and Non-Grocery retail revenues; however, we remain cognisant that we may enter new lockdown restrictions at any point. We are conscious that whilst these could affect revenue, we are confident that we have the right structure and agility to respond to changes in the external environment. We are continuing to generate new business opportunities.
Outlook
In spite of the challenging global outlook, we have continued to make excellent progress against our strategic objectives this Year, delivering leading loyalty and promotions programmes for some of the largest retailers in the world. Our people have been outstanding during these challenging times, and I am assured of our ability to respond to whatever may lie ahead.
We will continue to invest in our people, product development, sales and marketing, and in new geographies during the year ahead, whilst carefully managing the business and cost base. This will enable us to capitalise on accelerated digital transformation in the retail sector, as well as sustain the momentum we have gained in the US and
The first few months of the new financial year have begun well, in line with the Board's expectations, but we must of course be cognisant of the ongoing COVID-19 pandemic and possible delay to corporate decision-making and impact on our leisure and non-grocery retail clients particularly. We anticipate revenues from our existing clients to grow during the year, as new phases of their programmes are implemented, and we have a focused strategy to capture more of the Tier 1 market.
We have made great progress on those things that we can control and responded with great agility to those things outside our control. I am confident that this will stand us in remarkably good stead whatever the future may hold. The business is in better shape than it was pre-COVID-19 and I am excited by the opportunity ahead.
Financial Review
Key Performance Indicators
Financial | 2020 | 2019 |
Revenue | 20,421 | 16,929 |
Recurring revenue | 14,916 | 11,999 |
Adjusted EBITDA (1) | 3,278 | 714 |
Operating loss before interest and tax | (42) | (2,531) |
Net cash/(debt) (2) | 1,519 | (1,237) |
Cash and cash equivalents | 1,519 | 1,363 |
Short-term borrowings | - | (2,600) |
Non-financial | 2020 | 2019 |
AIR volumes | 2,121.8m | 883.5m |
Recurring revenue: |
|
|
- Licence revenue | | |
- AIR transaction revenue | | |
- SMS transaction revenue | | |
Total recurring revenue | 73% | 71% |
Long-term contract customer churn by value | 0.9% | 0.8% |
(1) Adjusted EBITDA excludes share-based payment charges along with depreciation, amortisation, interest and tax from the measure of profit and is reconciled to the GAAP measure of loss before taxation in note 5.
(2) Net cash/(debt) is cash and cash equivalents less borrowings.
Group results
Revenue
Revenue growth for the Group was 21% for the Year (FY19: 23%). Half on half growth was achieved during the Year despite revenue being held back by the impact of COVID-19 on the Group's F&B clients and some of its
COVID-19 saw many of the Group's clients in the
Revenue growth was driven by important wins during the Year, both in the
Overall, revenue from the AIR platform represents 94% of total revenue,
Overall,
Gross profit
Gross profit grew 21% to
Costs of sales include the cost of sending SMS messages, revenue share agreements and outsourced, bespoke development work. All internal resource costs are recognised within operating costs, net of capitalised development and contract costs.
Adjusted operating expenses
FY20 has seen us build on the foundations laid in the prior year for running the business in a "Better, Simpler, Cheaper" way, exercising agility in how we manage the cost base, whilst continuing to invest in growth. Growth in adjusted operating expenses has been limited to just 5% at
The increase in staff costs to
The successful migration of our environments to GCP was completed in
Capitalised product development costs were
Adjusted EBITDA
The growth in revenue and tight control of costs, particularly through the COVID-19 period, has resulted in a significant increase in adjusted EBITDA which is up 359% at
EPS and dividend
Finance expense was maintained at
Following the Group's move to EBITDA profitability, a deferred tax asset has been recognised utilising a proportion of the historic losses brought forward in the
As a result, loss after taxation was
The Board does not feel it appropriate at this time to commence paying dividends and continues to invest in its growth strategy.
Group Statement of Financial Position
The Group had net assets of
Non-current assets increased by
Cashflow and net cash
The Group ended the Year with net cash of
The main components to the net cash inflow were the operating cash inflow of
The Group has made use of a number of COVID-19 linked schemes in order to manage its working capital, including the deferral of VAT and PAYE in the
Banking facility
The Group has remained comfortably within its banking covenants which relate to available headroom and adjusted EBITDA performance. Following the Year end, the Group has extended the term of its revolving loan facility with Barclays Bank PLC to expire on
Consolidated statement of total comprehensive income
for the Year ended
|
|
|
2020 | 2019 |
Continuing operations | Note
|
|
|
|
Revenue | 3 |
| 20,421 | 16,929 |
Cost of sales |
|
| (1,318) | (1,171) |
|
|
|
|
|
Gross profit |
|
| 19,103 | 15,758 |
|
|
|
|
|
Adjusted operating expenses (1) |
|
| (15,825) | (15,044) |
Profit before interest, tax, depreciation, amortisation and share-based payment charge |
|
| 3,278 | 714 |
Share based payment charge |
|
| (464) | (822) |
Depreciation and amortisation |
|
| (2,856) | (2,423) |
|
|
|
|
|
Operating loss |
|
| (42) | (2,531) |
|
|
|
|
|
Finance income |
|
| 1 | 1 |
Finance expense |
|
| (291) | (277) |
|
|
|
|
|
Loss before taxation |
|
| (332) | (2,807) |
|
|
|
|
|
Taxation |
|
| (122) | 447 |
Loss after taxation for the financial year |
|
| (454) | (2,360) |
Foreign exchange adjustments |
|
| (98) | 51 |
|
|
|
|
|
Total comprehensive loss attributable to the owners of the parent for the financial year |
|
| (552) | (2,309) |
(1) Adjusted operating expenses excludes share based payment charge, depreciation and amortisation
| ||||
Loss per share |
|
|
|
|
From continuing operations |
|
|
|
|
Basic and diluted | 4 |
| (1.77)p | (9.27)p |
Consolidated statement of financial position
as at
|
|
|
2020 |
2019 |
|
|
| | |
Non-current assets |
|
|
|
|
Intangible assets |
|
| 6,494 | 6,158 |
Contract fulfilment costs |
|
| 209 | 217 |
Property, plant and equipment |
|
| 903 | 1,205 |
Deferred taxation |
|
| 121 | - |
|
|
|
|
|
|
|
| 7,727 | 7,580 |
Current assets |
|
|
|
|
Trade and other receivables |
|
| 4,840 | 3,618 |
Current tax receivable |
|
| - | 370 |
Cash and cash equivalents |
|
| 1,519 | 1,363 |
|
|
|
|
|
|
|
| 6,359 | 5,351 |
|
|
|
|
|
Total assets |
|
| 14,086 | 12,931 |
|
|
|
|
|
Current liabilities Trade and other payables |
|
| (7,879) | (4,874) |
Financial liabilities |
|
| - | (2,600) |
|
|
| (7,879) | (7,474) |
Non-current liabilities |
|
|
|
|
Other payables |
|
| (1,783) | (1,137) |
Total liabilities |
|
| (9,662) | (8,611) |
|
|
|
|
|
Net assets |
|
| 4,424 | 4,320 |
|
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
Share capital |
|
| 257 | 255 |
Share premium |
|
| 17,256 | 17,066 |
Merger reserve |
|
| 3,278 | 3,278 |
Share option reserve |
|
| 3,525 | 3,236 |
Retained losses |
|
| (19,892) | (19,515) |
|
|
|
|
|
Total equity |
|
| 4,424 | 4,320 |
|
|
|
|
|
Consolidated statement of changes in equity
for the Year ended 30 June 2020
| Share capital | Share premium | Merger reserve | Share option reserve | Retained losses | Total |
| £000
| £000
| £000
| £000
| £000
| £000
|
Balance at 1 July 2018 | 254 | 17,055 | 3,278 | 2,430 | (17,222) | 5,795 |
|
|
|
|
|
|
|
Loss for the financial year | - | - | - | - | (2,360) | (2,360) |
Other comprehensive income Foreign exchange adjustments | - | - | - | - | 51 | 51 |
|
- |
- |
- |
- |
(2,309) |
(2,309) |
Transactions with owners recognised in equity |
|
|
|
|
|
|
Exercise of share options | 1 | 11 | - | - | - | 12 |
Fair value of share options exercised in the year | - | - | - | (16) | 16 | - |
Share-based payment charge | - | - | - | 822 | - | 822 |
| 1 | 11 | - | 806 | 16 | 834 |
Balance at 30 June 2019 | 255 | 17,066 | 3,278 | 3,236 | (19,515) | 4,320 |
|
|
|
|
|
|
|
Loss for the financial year | - | - | - | - | (454) | (454) |
Other comprehensive income |
|
|
|
|
|
|
Foreign exchange adjustments | - | - | - | - | (98) | (98) |
|
- |
- |
- |
- |
(552) |
(552) |
Transactions with owners recognised in equity |
|
|
|
|
|
|
Exercise of share options | 2 | 190 | - | - | - | 192 |
Fair value of share options exercised in the year | - | - | - | (175) | 175 | - |
Share-based payment charge | - | - | - | 464 | - | 464 |
| 2 | 190 | - | 289 | 175 | 656 |
Balance at 30 June 2020 | 257 | 17,256 | 3,278 | 3,525 | (19,892) | 4,424 |
Included in Retained losses is a cumulative foreign exchange balance of £31,000 (2019: £129,000).
Consolidated statement of cash flows
for the Year ended 30 June 2020
|
| 2020 | 2019 |
|
| £000
| £000
|
Cash flows from operating activities |
|
|
|
Loss before taxation |
| (332) | (2,807) |
Adjustments for: |
|
|
|
Depreciation |
| 370 | 407 |
Amortisation |
| 2,487 | 2,016 |
Share-based payment charge |
| 464 | 822 |
Finance income |
| (1) | (1) |
Finance expense |
| 291 | 277 |
(Increase)/decrease in trade and other receivables | (1,222) | 429 | |
Increase/(decrease) in trade and other payables | 3,793 | (71) | |
Income tax paid | (180) | (9) | |
Income tax received | 389 | 506 | |
Net cash flows from operating activities | 6,059 | 1,569 | |
|
|
|
|
Cash flows from investing activities |
|
|
|
Payments to acquire property, plant and equipment | (68) | (111) | |
Payments to acquire intangible assets and contract fulfilment costs |
| (2,815) | (2,596) |
Net cash flows used in investing activities | (2,883) | (2,707) | |
|
|
|
|
Cash flows from financing activities |
|
|
|
Net proceeds from issue of equity |
| 192 | 12 |
Proceeds from borrowings |
| 2,000 | 3,300 |
Repayment of borrowings |
| (4,600) | (1,800) |
Capital payments in respect of leases |
| (224) | (257) |
Interest paid in respect of leases |
| (44) | (56) |
Interest received |
| 2 | 1 |
Interest paid |
| (248) | (222) |
Net cash flows from financing activities |
| (2,922) | 978 |
|
|
|
|
Net increase/(decrease) in cash and cash equivalents in the year | 254 | (160) | |
Foreign exchange adjustments | (98) | 51 | |
Cash and cash equivalents at beginning of year |
| 1,363 | 1,472 |
Cash and cash equivalents at end of year |
| 1,519 | 1,363 |
Notes to the consolidated preliminary financial information
1 Basis of preparation
The financial information set out herein does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the Year ended 30 June 2020 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 15 September 2020 and which, if adopted by the members at the Annual General Meeting, will be delivered to the Registrar of Companies for
The financial information for the Year ended 30 June 2019 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 16 September 2019 and which have been delivered to the Registrar of Companies for
The reports of the auditor on both these financial statements were unqualified, did not include any references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.
The information included in this preliminary announcement has been prepared on a going concern basis under the historical cost convention, and in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and the International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board ("IASB") that are effective as at the date of these financial statements and in accordance with the provisions of the Companies Act 2006.
The Company is a public limited Company incorporated and domiciled in
2 Going concern
As part of their going concern review the Directors have followed the guidelines published by the Financial Reporting Council entitled "Guidance on the Going Concern Basis of Accounting and Reporting on Solvency and Liquidity Risks- Guidance for directors of companies that do not apply the
The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of approval of these consolidated financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period. A number of forecasts have been produced which take into consideration different assumptions on the timing and extent of recovery from COVID-19, including the risk of debtor default and the likely different recovery profiles of the different sectors in which the Group's services are offered.
On the basis of the above projections, and although the Group has net current liabilities at 30 June 2020, the Directors are confident that the Group has sufficient working capital and available funds to honour all of its obligations to creditors as and when they fall due. In reaching this conclusion, the Directors have considered the forecast cash headroom, including the impact of the extension of the revolving credit facility with Barclays Bank plc and the covenants associated with it, the resources available to the Group and the potential impact of changes in forecast growth and other assumptions, including the potential to avoid or defer certain costs and to reduce discretionary spend as mitigating actions in the event of such changes. Accordingly, the Directors continue to adopt the going concern basis in preparing this consolidated preliminary financial information.
3 Segmental analysis
The Group is organised into one principal operating division for management purposes. Therefore, the Group has only one operating segment and segmental information is not required to be disclosed. Revenue is analysed as follows:
|
| 2020 | 2019 |
|
| £000
| £000
|
Development and set up fees |
| 5,505 | 4,930 |
Subscription and transaction fees |
| 14,916 | 11,999 |
|
| 20,421 | 16,929 |
|
| 2020 | 2019 |
|
| £000
| £000
|
AIR revenue |
| 19,165 | 15,927 |
Messaging revenue |
| 1,256 | 1,002 |
|
| 20,421 | 16,929 |
Continuing revenues can be attributed to the following countries, based on the customers' location:
|
| 2020 | 2019 |
|
| £000
| £000
|
|
| 13,398 | 10,276 |
|
| 6,706 | 6,023 |
Rest of |
| 159 | 210 |
|
| 158 | 420 |
|
| 20,421 | 16,929 |
4 Loss per share
The calculation of basic and diluted loss per share is based on the result attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the Year. The weighted average number of shares for the purpose of calculating the basic and diluted measures is the same. This is because the outstanding share options would have the effect of reducing the loss per ordinary share and therefore would be anti-dilutive. Basic and diluted loss per share from continuing operations is calculated as follows:
| Loss per share pence | Loss £000 | 2020 Weighted average number of ordinary shares | Loss per share pence | Loss £000 | 2019 Weighted average number of ordinary shares |
Basic and diluted loss per share | (1.77) | (454) | 25,659,034 | (9.27) | (2,360) | 25,454,371 |
5 Alternative performance measure
EBITDA is a key performance measure for the Group and is derived as follows:
|
| 2020 | 2019 |
|
| £000 | £000 |
|
|
|
|
Loss before taxation | (332) | (2,807) | |
Add back: |
|
| |
Finance income and expense | 290 | 276 | |
Share-based payments | 464 | 822 | |
Depreciation and amortisation | 2,856 | 2,423 | |
EBITDA |
3,278 |
714 |
6 Net cash/(debt)
|
| 30 June 2019 | Cash flow | Foreign exchange adjustments | 30 June 2020 |
|
| £000 | £000 | £000 | £000 |
|
|
|
|
|
|
Cash and cash equivalents | 1,363 | 254 | (98) | 1,519 | |
Financial liabilities | (2,600) | 2,600 | - | - | |
Net cash/(debt) |
(1,237) | 2,854 | (98) |
1,519 |
7 Report and Accounts
A copy of the Annual Report and Accounts for the Year ended 30 June 2020 will be sent to all shareholders in due course together with notice of the Annual General Meeting.
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Quick facts: Eagle Eye Solutions Group PLC
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Market: AIM
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