ROSSLYN DATA TECHNOLOGIES PLC

Interim / Quarterly Report • Jan 20, 2015

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RNS Number : 5725C

Rosslyn Data Technologies PLC

20 January 2015

20 January 2015

Rosslyn Data Technologies plc

("Rosslyn" or the "Company")

Unaudited Group Interim Financial Statements for the six months ended 31 October 2014

Rosslyn Data Technologies plc (AIM: RDT)

Rosslyn Data Technologies is a leading global data technology company which has developed smart technologies that are enabling companies of all sizes to turn their complex data into meaningful information.

Financial Highlights

·      Group revenues up 23% to £1,250,770 (2013: £1,019,630)

·      Adjusted EBITDA* loss of £1,660,981 (2013: £1,337,159)

·      Loss before tax £1,684,322 (2013: £1,672,708)

·      Net Cash at 31 October 2014 £6.2m (2013: net debt £0.1m)

·      Subscription revenue remains strong

·      Tight financial and operational management delivered a lower cash burn and loss than management expected

*adjustment for share based payment as shown within the Financial Review

Operational and Strategic Highlights

·      Strategic Partnership with a Big 4 Consultancy which has been revenue generating from the outset and the pipeline is growing

·      Strategic wins with Coca Cola Hellenic, Ceva Logistics and a global defence manufacturer.

·      Total client numbers up by over 50%

·      Key hires made in the UK and US delivering operational scalability

Post Period:

·      Momentum in the partner program continues:

Fortune 1000 Business & Technology Services firm and a global business outsourcing company where work with both has already started on a number of opportunities.

·      Landed major new accounts, which include - a European utility company, a leading global pharmaceutical company and broken new ground by winning The State University System of Florida for 12 Universities.

·      Expansion of accounts - near 100% contracted revenue increase from global drinks manufacturer, whilst in the US we have won a national contract with a leading health insurance company.

·      Launch of RAPid Intouch - flexible survey tool linked to the RAPid platform.

·      The sales pipeline is healthy and growing.

Enquiries:

Rosslyn Data Technologies plc	Charles Clark, Chief Executive Officer Francis Reid, Chief Financial Officer	+44(0)20 7138 3204
Blytheweigh - Financial PR	Tim Blythe	+44(0)20 7138 3205 +44(0) 7816 924 626
	Alex Shilov	+44(0)20 7138 3553 +44(0) 7989 394 027
Cenkos Securities - Nominated Adviser, Broker	Stephen Keys Mark Connelly Michael Johnson	+44(0)20 7397 8926

CEO's Statement:

We started the year with the objective of establishing a strong capital base and delivering on our key business objectives across our operations and target market.  I am pleased to report that we are on track and in some key financial / operational areas are ahead of plans.  The combination of our talented and skilled team and our deep domain knowledge of our market place is fuelling the continued development of innovative smart solutions to solve problems which stand in the way of enterprises unlocking the value in their data.  This is being increasingly evidenced through our growing list of clients which include many leading global businesses and more importantly the increasing number of partnerships we are establishing with global technology, BPO and consultancy firms. 

Our partnership strategy is central to our future growth plans as they enable Rosslyn to grow over a shorter time frame, whilst giving us geographical reach and access to multiple new verticals.

The direct sales teams continue to gain momentum and delivered a strong performance.  This is being underpinned by improving sales cycle metrics and healthy demand side dynamics.

Our first half progress has moved us significantly forward.  The Group is well positioned to benefit from increasing opportunities in its key markets which are being driven by the need for more data driven decision making efficiency gains, cost savings, improved sales and marketing effectiveness and regulatory compliance needs. 

We remain confident that supported by strong contracted revenue visibility and new business momentum we will continue to make solid progress.

Business Review

The six months to 31 October 2014 saw the Company continue to generate substantial market traction. Following a successful IPO and admission to AIM in April the Company is well-capitalised to execute its plans and develop new market opportunities.

The first half saw the Company achieve a key operating milestone by entering into an international agreement with a Big 4 Consultancy firm which was a very material step forward in the development of our partnership family. This has happened more quickly than we anticipated at the start of the year.  

Our strong sales growth was achieved through our approach of being able to help our clients significantly reduce the complexities associated with analytics, reduce the costs of deploying analytics, increase the speed of deployment and demonstrate a positive Return on Investment.  Examples include an integration project enabling significant cost savings for a global logistics company and a partner of the Company deployed an analytics suite into a global defence company which gave them insight into the supply chain. The comparative value gap between a traditional on-premise solution and our cloud based approach is increasing as we continue to develop faster, better and more intuitive solutions.  This will assist us improve our sales cycle metrics, accelerate our expansion plans and maintain a low churn rate.

We are expanding our sales and marketing teams in both the UK and US, focusing on large enterprises in key industry segments and have deployed dedicated partner managers whose focus is on establishing deep and trusted relationships with these strategic accounts.  Supporting each of these areas is an expanding customer success team who support not just the success but also the expansion of the footprint of the platform in each account. The Company's model continues to be to win new clients with a view to expanding the contracts once the clients have benefited from the initial cost and efficiency savings of Rosslyn's products. The pipeline is growing strongly and we expect to announce further new business wins in the coming weeks.  

We are continuing to build on our world-class development team.  Their depth of expertise and agile approach enables us to respond quickly to not just client needs but also market opportunities and we are increasingly encouraged by the widening scope our clients are seeking to leverage the platform.

The Group's strategy is to build a strong and dynamic company focused on above average organic growth and building its shareholders a strong financial track record. 

Financial Review

Group revenues increased by 23% to £1,250,770 (2013: £1,019,630), with all growth being of an organic nature.

EBITDA loss increased marginally to £1,660,981 (2013: £1,655,159). On an adjusted basis, which ignores the impact of share based payments charge of £318,000 in 2013, there was a 24% increase in the loss of £1,660,981 (2013: £1,337,159).

The loss before income tax was £1,684,322 (2013: £1,672,708). Adjusting for the impact of the share based payment cost described above the loss increased by 24% to £1,684,322 (2013:£1,354,708).

The basic and diluted loss per share for the period was 2.14p (2013 (4.58p).

Net cash / debt at the end of the six month period was £6.2m (2013: debt £0.1m). Once the outstanding fees relating to the IPO were settled and the repayment of an outstanding loan of £200,000 in place at the year end, the business consumed £2.3m of cash (2013: £1.4m). Capital expenditure in the period was £59,558 (2013: £28,685). Working capital absorbed £0.9m (2013: £0.2m) as the business rebalanced after the IPO; within the 2014 number payment of outstanding IPO costs accounted for £0.4m referred to above.

Cash consumption was in line with expectations set out at the time of the IPO. The proceeds of £10m raised from the IPO were targeted at investment into the RAPid product, and the sales and marketing effort. The payback on this continuing investment will be seen in the months ahead but we are pleased with the organic growth we have seen in the first half and the real potential being seen by partner interest in our technology.

Average headcount in the period increased to 49 (2013: 35). The investment in our people was focused particularly on our technical development team and sales and marketing resource.

Prospects

The second half of the year has begun well. There have been a number of contract wins already and the contract award with the US state universities group is an exciting opportunity which breaks new ground and provides a solid base from which to expand our reach into the large US education field.

We have been informed by a number of partners and direct clients that we have successfully been chosen as preferred vendor in both the US and UK which cover a number of new exciting verticals for RDT which further underpins the size of the opportunity and the broad usefulness of the platform.  We are in various stages of completing the contractual agreements and look forward to updating you in due course.

The research and development team are completing a number of exciting new technologies which we expect to be release in full production during this period which will support us drive further value into our client base whilst masking the non-trivial complexities standing in the way of companies exploiting their data.     

We will continue to develop the partnership family. These partners are the gate keepers and trusted advisors to some of the largest companies in the world and are now embedding our platform in their services they deliver.  The platform is enabling them to create new products and services which are supporting them drive ever more value and deeper data literacy across their client base.  As these leaders recognise and adopt RDT's technologies it underpins the Executive teams clear strategy and execution capability.  This powerful combination provides investors a powerful springboard for the future. 

Unaudited Consolidated Income Statement
for the Period Ended 31 October 2014
		Unaudited 6 Months ended 31 October 2014	Unaudited 6 Months ended 31 October 2013	Audited Year ended 30 April 2014
	Notes	£	£	£
Revenue	4	1,250,770	1,019,630	2,066,041
Cost of sales		(225,503)	(190,296)	(349,072)
GROSS PROFIT		1,025,267	829,334	1,716,969
Other operating income		36,664	-	34,615
Administrative expenses - excluding exceptional items		-	-	(4,638,104)
Administrative expenses - exceptional items	5	-	-	(223,460)
Administrative expenses		(2,758,253)	(2,502,042)	(4,861,564)
OPERATING LOSS		(1,696,322)	(1,672,708)	(3,109,980)
Finance costs		-	-	(1,753)
Finance income		12,000	-	-
LOSS BEFORE INCOME TAX		(1,684,322)	(1,672,708)	(3,111,733)
Income tax		69,111	-	148,510
LOSS FOR THE PERIOD ATTRIBUTABLE TO THE OWNERS OF THE PARENT		(1,615,211)	(1,672,708)	(2,963,223)
The Group has no items to be recognised in the "Group Statement of Comprehensive Income" and, consequently, this statement has not been shown.
Basic and diluted loss per share	6	Pence 2.14	Pence 4.58	Pence 7.43
The notes are an integral part of these Unaudited Group Interim Financial Statements.

Unaudited Consolidated Statement of Financial Position
					Unaudited as at	Unaudited as at	Audited as at
					31 October	31 October	30 April
					2014	2013	2014
					£	£	£
ASSETS
NON-CURRENT ASSETS
Intangible assets					15,400	10,036	17,019
Property, plant and equipment					54,850	44,786	29,016
					70,250	54,822	46,035
CURRENT ASSETS
Trade and other receivables					909,862	382,942	714,091
Corporation tax receivable					222,643	30	147,643
Cash and cash equivalents					6,207,039	206,369	9,019,458
					7,339,544	589,341	9,881,192
TOTAL ASSETS					7,409,794	644,163	9,927,227
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax					(10,023)	(5,001)	(4,134)
CURRENT LIABILITIES
Trade and other payables					(1,232,719)	(1,059,963)	(1,914,588)
Financial liabilities - borrowings					-	(325,000)	(200,000)
					(1,232,719)	(1,384,963)	(2,114,588)
TOTAL LIABILITIES					(1,242,742)	(1,389,964)	(2,118,722)
NET (LIABILITIES)/ASSETS					6,167,052	(745,801)	7,808,505
EQUITY
Called up share capital					377,029	457	377,029
Share premium					8,515,773	2,650,001	8,515,773
Shares to be issued					-	1,541,585	-
Forex Reserve					(26,242)	-	-
Merger Reserve					5,133,062	-	5,133,062
Accumulated loss					(7,832,570)	(4,937,844)	(6,217,359)
TOTAL EQUITY					6,167,052	(745,801)	7,808,505
The notes are an integral part of these Unaudited Group Interim Financial Statements.

Unaudited Consolidated Statement of Changes in Equity
for the Period Ended 31 October 2014
	CALLED UP SHARE CAPITAL	SHARES TO BE ISSUED		ACCUMULATED LOSS			FOREX RESERVE	SHARE PREMIUM RESERVE		MERGER RESERVE		TOTAL EQUITY
	£	£		£			£	£		£		£
Balance as at 30 April 2013	457	-		(3,583,136)			-	2,650,001		-		(932,678)
Income statement	-	-		(1,672,708)			-	-		-		(1,672,708)
Share based payments	-	-		318,000			-	-		-		318,000
Shares to be issued	-	1,541,585		-			-	-		-		1,541,585
Balance as at 31 October 2013	457	1,541,585		(4,937,844)			-	2,650,001		-		(745,801)
Issue of share capital 28.11 / 30.01	97	(1,541,585)		-			-	2,837,311		-		1,295,823
Offset of share issue costs	-	-		-			-	(129,297)		-		(129,297)
Issue of share capital 23.04	10	-		-			-	-		-		10
Share based payments	-	-		11,000			-	-		-		11,000
Reorganisation of the Group	(564)	-		-			-	(5,358,015)		-		(5,358,579)
Issue of share capital 23.04	225,514	-		-			-	-		-		225,514
Issue of share capital 29.04	151,515	-		-			-	9,848,485		-		10,000,000
Offset of share issue costs	-	-		-			-	(1,332,712)		-		(1,332,712)
Reorganisation of the Group	-	-		-			-	-		5,133,062		5,133,062
Income statement	-	-		(1,290,515)			-	-		-		(1,290,515)
Balance as at 30 April 2014	377,029	-		(6,217,359)			-	8,515,773		5,133,062		7,808,505
Income statement	-	-		(1,615,211)			-	-		-		(1,615,211)
Currency revaluation	-	-		-			(26,242)	-		-		(26,242)
Balance as at 31 October 2014	377,029	-		(7,832,570)			(26,242)	8,515,773		5,133,062		6,167,052
The notes are an integral part of these Unaudited Group Interim Financial Statements.

Unaudited Consolidated Statement of Cash Flows
for the Period Ended 31 October 2014
	Unaudited	Unaudited	Audited
	6  months ended	6 months ended	Year ended
	31 October 2014	31 October 2013	30 April 2014
	£	£	£
Cash flows used in operating activities
Cash generated from operations	(2,552,861)	(1,514,987)	(2,694,552)
Finance costs paid	-	-	(1,753)
Corporation tax received	-	131,235	131,235
Net cash used in operating activities	(2,552,861)	(1,383,752)	(2,565,070)
Cash flows used in investing activities
Purchase of intangible fixed assets	(5,627)	(9,582)	(19,450)
Purchase of property, plant and equipment	(53,931)	(19,103)	(23,678)
Net cash used in investing activities	(59,558)	(28,685)	(43,128)
Cash flows generated from financing activities
New loans in year	(200,000)	-	200,000
Proceeds from share issuance	-	1,541,585	12,812,444
Costs of share issuance	-	-	(1,462,009)
Net cash generated from financing activities	(200,000)	1,541,585	11,550,435
(Decrease)/increase in cash and cash equivalents	(2,812,419)	129,148	8,942,237
Cash and cash equivalents at beginning of period	9,019,458	77,221	77,221
Cash and cash equivalents at end of period	6,207,039	206,369	9,019,458

The reconciliation of loss before income tax to cash generated from operations is shown overleaf. The notes are an integral part of these Unaudited Group Interim Financial Statements.

RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
		Unaudited	Unaudited		Audited
		Period ended	Period ended		Year ended
		31 October 2014	31 October 2013		30 April 2014
	Notes	£	£		£
Loss before income tax		(1,684,322)	(1,672,708)		(3,111,733)
Share based payments		-	318,000		329,000
Depreciation charges	4	28,096	17,484		37,829
Amortisation charges	4	7,245	65		2,950
Finance costs		-	-		1,753
Finance income		(12,000)	-		-
Currency adjustment		(14,240)	-		-
		(1,675,221)	(1,337,159)		(2,740,201)
Decrease/(increase) in trade and other receivables		(195,771)	31,739		(299,410)
Increase in trade and other payables		(681,869)	(209,567)		345,059
Cash generated from operations		(2,552,861)	(1,514,987)		(2,694,552)
The notes are an integral part of these Unaudited Group Interim Financial Statements.

Notes to the Unaudited Group Interim Financial Statements for the six months ended 31 October 2014

1.   Nature of operations and general information

The principal activity of the Company and its subsidiaries (together the Group) is the provision of data analytics using a proprietary form.

Rosslyn Data Technologies plc is the group's ultimate parent company. It is incorporated and domiciled in the UK. The registered office of the Company is 25 Eccleston Place, London SW1W 9NF, which is also the principal place of business for its UK based operating subsidiary, Rosslyn Analytics Limited.

Rosslyn Data Technologies plc's shares are listed on AIM, a market operated by the London Stock exchange. This consolidated unaudited half-yearly report was approved by the Board of Directors on 19 January 2015.

The financial information set out in this half-yearly financial report does not constitute statutory accounts as defined in Sections 434(3) and 435(3) of the Companies Act 2006. The Group's statutory financial statements for the year to 30 April 2014 have been filed with the Registrar of Companies and are available at www.rosslyndatatechnologies.com. The auditors' report on those financial statements was unqualified and did not contain any statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

2.   Basis of preparation

The financial information presented in this document has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations that are expected to be applicable for the year ending 30 April 2014. The principal accounting policies used in preparing these Interim Results are unchanged from those adopted and disclosed in the audited financial statements for the year ended 30 April 2014.

The financial information in this statement relating to the six months ended 31 October 2014 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The financial information for the period ended 31 October 2014 does not constitute the full statutory accounts for that period. The financial information in this statement relating to the six months ended 31 October 2013 has not been audited and does not constitute full statutory accounts for that period. The Annual Report and Financial Statements for 2014 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2014 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

3.   Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 April 2014.

4.   Segmental Reporting

All segment revenue, loss before taxation, assets and liabilities are attributable to the principal activity of the Group being the provision of data analytics using a proprietary form and other related services.

	6 month period ended 31 October 2014
	UK		USA		Total
	£		£		£
Income
Total revenue	934,978		315,792		1,250,770
Total revenue from external customers	934,978		315,792		1,250,770
EBITDA	(1,601,349)		(59,632)		(1,660,981)
Depreciation	(28,096)		-		(28,096)
Amortisation	(7,245)		-		(7,245)
Operating loss	(1,636,690)		(59,632)		(1,696,322)
Finance income	12,000		-		12,000
Loss before income tax	(1,624,690)		(59,632)		(1,684,322)
Total assets	7,105,632		304,162		7,409,794
Total liabilities	(1,053,485)		(189,257)		(1,242,742)
Capital expenditure during the year
Intangible assets	5,627		-		5,627
Property, plant and equipment	53,931		-		53,931

	6 month period ended 31 October 2013
	UK		USA		Total
	£		£		£
Income
Total revenue	1,019,630		-		1,019,630
Total revenue from external customers	1,019,630		-		1,019,630
EBITDA	(1,380,113)		(275,046)		(1,655,159)
Depreciation	(17,484)		-		(17,484)
Amortisation	(65)		-		(65)
Operating loss	(1,397,662)		(275,046)		(1,672,708)
Loss before income tax	(1,397,662)		(275,046)		(1,672,708)
Total assets	664,163		-		664,163
Total liabilities	(1,114,918)		(275,046)		(1,389,964)
Capital expenditure during the year
Intangible assets	9,582		-		9,582
Property, plant and equipment	19,103		-		19,103

	Year ended 30 April 2014
	UK		USA		Total
	£		£		£
Income
Total revenue	1,893,589		172,452		2,066,041
Total revenue from external customers	1,893,589		172,452		2,066,041
EBITDA	(2,492,360)		(353,381)		(2,845,741)
Depreciation	(37,829)		-		(37,829)
Amortisation	(2,950)		-		(2,950)
Exceptional items	(223,460)		-		(223,460)
Operating loss	(2,756,599)		(353,381)		(3,109,980)
Finance cost	(1,753)		-		(1,753)
Loss before income tax	(2,758,352)		(353,381)		(3,111,733)
Total assets	9,733,072		194,155		9,927,227
Total liabilities	(1,883,442)		(235,280)		(2,118,722)
Capital expenditure during the year
Intangible assets	19,450		-		19,450
Property, plant and equipment	23,678		-		23,678

5.   Exceptional Items

During the year ended 30 April 2014 settlement and legal costs of £223,460 (2013:nil) were incurred in respect of an employee-related matter. This matter is resolved in full and no further costs are expected.

6.   Basic and diluted loss per share

Basic earnings per share is calculated by diving the net loss for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated by dividing net profit for the period attributable to ordinary shareholders outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

	Unaudited	Unaudited	Audited
	Period ended	Period ended	Year ended
	31 October 2014	31 October 2013	30 April 2014
	£	£	£
Loss for the period attributable to the owners of the parent	(1,615,211)	(1,672,708)	(2,963,223)
Weighted average number of ordinary shares	75,405,814	36,518,840	39,885,226
	Pence	Pence	Pence
Basic and diluted loss per share: ordinary shareholders	2.14	4.58	7.43

Earnings per share has been calculated on the basis of the capital restructuring prior to the IPO, on 29th April 2014, in accordance with IAS 33.

7.      Principal risks and uncertainties

The principal risks and uncertainties for this 6 month period remain broadly consistent with those set out in the Financial Review section of the financial statements of the Group for the year ended 30 April 2014.

Notes to Editors

Rosslyn Data Technologies plc, (AIM: RDT), a leading provider of a Cloud-based enterprise data analytics platform, was founded in 2005 by Charles Clark and Hugh Cox. Business Intelligence was ranked first in the top ten technology priorities for Chief Information Officers in 2012 by Gartner. The Company provides analytical services by combining four key technologies: data extraction; cleansing; enrichment; and visualisation, through a single cloud platform enabling users with detailed data to make more informed decisions. Rosslyn's RAPid platform is the Group's primary product available to its multinational customers, including Aberdeen Asset Management plc, Babcock Corporate Services plc, Xerox Business Services and Coca-Cola Enterprises, Inc. Rosslyn Data Technologies plc is the ultimate holding company of the Group and owns 100 per cent. of Rosslyn Analytics Limited.

Further information can also be found on the Company's website at:  www.rosslynanalytics.com

This information is provided by RNS

The company news service from the London Stock Exchange

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