ROSSLYN DATA TECHNOLOGIES PLC

Interim / Quarterly Report • Jan 14, 2016

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RNS Number : 8156L

Rosslyn Data Technologies PLC

14 January 2016

Rosslyn Data Technologies plc

("Rosslyn" or the "Company" or the "Group")

Unaudited Group Interim Financial Statements for the six months ended 31 October 2015

Rosslyn, 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, is pleased to announce its

interim results.

Financial Highlights

·      Group revenues up 45.6% to £1,821,517 (2014: £1,250,770)

·      EBITDA loss decreases  22% to £1,290,170 (2014: £1,660,981)

·      Loss before tax decrease 22% to £1,316,412 (2014: £1,684,322)

·      Net Cash at 31 October 2015 £2.6m (2014: £6.2m)

·      Subscription revenue remains strong

Operational and Strategic Highlights

·      Strategic Partnership with PwC is growing well and a more recent partnership with Genpact, a leading Global BPO firm, is strengthening; 

·      Recently selected as one of the small number of Microsoft Red Carpet partners;

·      Customer wins include Anglo American, Kingfisher and a global defence manufacturer

·      Total customer numbers up year on year by over 25% to around 150 clients

·      Progress on track to achieve goal of cash flow break-even during next financial year, in line with forecasts at the time of the IPO.

Post Period Highlights

·      Momentum in the partner program continues - the Company has secured a valuable white label agreement with one partner and signed a distribution agreement with a partner in the Middle East

·      Expansion of accounts - near 100% increase in contracted revenue a from global defence contractor

·      Launch of RAPid Data Extract Studio - a new self-service tool from which clients can more effectively tap into all the valuable data held within their diverse ERP platforms.  The directors believe this is potentially disruptive and replaces the need for the combination of expensive consultants and complicated tools currently needed by customers

·      Sales pipeline is healthy and growing

·      Forrester Research, a leading global independent technology and market research company that provides advice on the existing and potential impact of technology, ranks Rosslyn's RAPid Big Data platform as a "strong performer"

Charles Clark, Chief Executive, said, "I am very pleased with the progress made to date and believe that the Company is increasingly well positioned to take advantage of the business opportunity, as the attached link, below, illustrates.

"The RAPid platform is emerging as a recognised and well regarded technology in this large, growing market place and, through our continued and disciplined execution, we expect progress to continue.

"Our target of achieving cash flow break-even during the next financial year remains on track and this combination of progress and opportunity does, we believe, put the Company in an exciting position for the rest of this year and beyond." 

http://www.rns-pdf.londonstockexchange.com/rns/8156L_-2016-1-13.pdf

Enquiries:

Rosslyn Data Technologies plc	Charles Clark, Chief Executive Officer Roger Bullen, Chief Financial Officer	+44(0)20 7138 3204 +44(0)20 7138 3203
Blytheweigh - Financial PR	Tim Blythe Wendy Haowei	+44(0)20 7138 3205 +44(0) 7816 924 626
Cenkos Securities - Nominated Adviser, Broker	Stephen Keys Camilla Hume	+44(0)20 7397 8924

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 percent of Rosslyn Analytics Limited.

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

Chief Executive Review

We executed another strong six months as we continue to acquire new customers, expand relationships with existing customers and partners, grow internationally and innovate.  Our objective of establishing a strong capital base and delivering on our key business objectives across our operations and target market remains on track. 

I am also pleased to report that our focus on costs and sales performance provides us with the visibility and confidence to expect break-even during the next financial year, as forecasted at the time of the IPO.  

The strength of the RAPid platform is being increasingly recognised in the industry which is giving us the opportunity to take major steps forward on a number of important fronts, most notably our improved win loss ratio in competitive bids.  Underpinning the progress is our talented and skilled team which is fuelling the continued development of innovative smart solutions which is widening the sphere of sales opportunities.  This is being played out 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.  These partnerships bring us closer to where high volumes of business and commerce meet giving us the opportunity to play a role. During the period we secured notable customer wins with one partner leveraging the platform to deliver 11 client projects which included more than €50bn in transaction value being analysed. 

The direct sales teams continue to gain momentum and have delivered a strong performance.  This strength and performance is being underpinned by improving sales cycle metrics and a healthy demand side dynamic. Furthermore, revenue growth, from our installed customer base, has moved ahead of the churn rate and, we believe, is evidence of early success in our "land and expand" strategy as well as of the emerging value of the Rosslyn business model.  

The Group is well positioned to benefit from increasing opportunities in its key markets which are being driven by customer need for speed and certainty as the importance of leveraging corporate data increases.  Our new business prospects are actively exploring ways to capture efficiency gains, cost savings, improved sales and marketing effectiveness and meet their regulatory compliance needs.  Trusted data is fundamental to our customers' ability to deliver on each of these.

We remain confident that, supported by strong contracted revenue visibility and new business momentum, we will continue to build on the solid progress made in the first half of the year.

Business Review

The six months to 31 October 2015 saw the Company continue to generate substantial market traction, with new contracts won with large enterprises including Anglo American, Berensden, Mitie and a Global Law Firm. The Directors believe that the Company is sufficiently capitalised to execute its plans and develop new market opportunities.

Our strong sales growth was achieved through our approach of being able to assist enterprises to 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.  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.  We believe this will assist us in improving our sales cycle metrics, accelerate our expansion plans and maintain a low churn rate.

We are continuing to expand 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 sales pipeline is growing as expected and I am pleased to report that we are in contract negotiations with a number of large enterprises and look forward to updating shareholders in due course.  On the partner front, our focus is on making our existing partners ever more effective in selling the benefits of the platform through which we extend and scale our sales capability. 

We are continuing to build on our world-class and well regarded development team.  Their depth of expertise and agile approach enables us to respond quickly to customer needs and market opportunities and give us an advantage over the traditional on-premise approach. 

The Group's strategy is to build a strong and dynamic company focused on organic growth and building shareholder value through delivering on our goals and a strong financial track record. 

Financial Review

Group revenues increased by 45% to £1,821,517 (2014: £1,250,770), with all growth being organic.

EBITDA loss decreased by 22% to £1,290,170 (2014: £1,660,981) and there was also a 22% decrease in the loss before tax of £1,316,412 (2014: £1,684,322).

The basic and diluted loss per share for the period was 1.75p (2014 (2.14p).

Net cash / debt at the end of the six month period was £2.6m (2014: £6.2m). Cash consumed in the first half equated to £2.1m (2014: £2.6m).

Cash consumption was in line with expectations set for the year and in line with those set out at the time of the IPO. The proceeds from the IPO continue to be targeted at investment into the RAPid product and the sales and marketing effort. It is expected that the payback on this continuing investment will be seen in the months ahead and we are pleased with the organic growth we have seen in the first half of the year and the real potential we see from the partner interest in our technology.

Average headcount in the period remained stable at 49 (2014: 49). The investment in our people was focused particularly on our technical development team in 2013/14 but has begun to migrate towards our sales and marketing resource in the first half of this year.

Prospects

The second half of the year has begun well. There have been a number of new contract wins as well as expansion of our current customer portfolio.

The firm has been short listed as the preferred vendor in both the US and UK for potential new contracts which cover a number of new exciting verticals and applications for RDT and we look forward to updating shareholders in due course.  Our recent invitation to become one of Microsoft's select group of global Red Carpet partners is a strong endorsement of our technology and, we believe, positions RDT's RAPid platform and its associated data technologies within the ecosystem of one of the emerging and principle players in the cloud analytics space.    

The research and development team is executing on an exciting schedule of improvements and new technologies, which we expect to be released into full production during the second half of this financial year.  Of note, we expect to deliver our clients predictive analytical capabilities whilst increasing the number of data sources from which our customers can enrich their source data, including sanction, black list and macro economic indices. We expect this to improve our customers' risk analytics and compliance reporting capabilities, and information and insights to support their strategic decision making.

The Directors are pleased with the progress made to date and believe that the Company is increasingly well positioned to take advantage of the business opportunity. The RAPid platform is emerging as a recognised and well regarded technology in this large, growing market place and, through our continued and disciplined execution, we expect progress to continue.  Our target of achieving cash flow break-even during the next financial year remains on track and this combination of progress and opportunity does, we believe, put the Company in an exciting position for the rest of this year and beyond. 

Unaudited Consolidated Income Statement
for the Period Ended 31 October 2015
		Unaudited 6 Months ended 31 October 2015	Unaudited 6 Months ended 31 October 2014	Audited Year ended 30 April 2015
	Notes	£	£	£
Revenue	4	1,821,517	1,250,770	2,826,034
Cost of sales		(136,425)	(225,503)	(442,309)
GROSS PROFIT		1,685,092	1,025,267	2,383,725
Other operating income		-	36,664	128,948
Administrative expenses		(3,002,527)	(2,758,253)	(6,019,581)
OPERATING LOSS		(1,317,435)	(1,696,322)	(3,506,908)
Finance costs		-	-	-
Finance income		1,023	12,000	28,687
LOSS BEFORE INCOME TAX		(1,316,412)	(1,684,322)	(3,478,221)
Income tax			69,111	222,216
LOSS FOR THE YEAR				(3,256,005)
Other Comprehensive Income				(18,503)
LOSS FOR THE PERIOD ATTRIBUTABLE TO THE OWNERS OF THE PARENT		(1,316,412)	(1,615,211)	(3,274,508)
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	5	Pence 1.75	Pence 2.14	Pence 4.34
The notes are an integral part of these Unaudited Group Interim Financial Statements.

Unaudited Consolidated Statement of Financial Position For the Period Ended 31 October 2015
				Unaudited as at	Unaudited as at	Audited as at
				31 October	31 October	30 April
				2015	2014	2015
				£	£	£
ASSETS
NON-CURRENT ASSETS
Intangible assets				-	15,400	-
Property, plant and equipment				79,506	54,850	104,005
				79,506	70,250	104,005
CURRENT ASSETS
Trade and other receivables				1,611,133	909,862	1,203,747
Corporation tax receivable				218,082	222,643	218,082
Cash and cash equivalents				2,616,375	6,207,039	4,712,730
				4,445,590	7,339,544	6,134,559
TOTAL ASSETS				4,525,096	7,409,794	6,238,564
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax				-	(10,023)	-
CURRENT LIABILITIES
Trade and other payables				(1,332,383)	(1,232,719)	(1,704,224)
Financial liabilities - borrowings				-	-	-
				(1,332,383)	(1,232,719)	(1,704,224)
TOTAL LIABILITIES				(1,332,383)	(1,242,742)	(1,704,224)
NET (LIABILITIES)/ASSETS				3,192,713	6,167,052	4,534,340
EQUITY
Called up share capital				377,229	377,029	377,229
Share premium				8,515,916	8,515,773	8,515,916
Shares based payment reserve				288,017	329,000	288,017
Forex Reserve				(43,718)	(26,242)	(18,503)
Merger Reserve				5,133,062	5,133,062	5,133,062
Accumulated loss				(11,077,793)	(8,161,570)	(9,761,381)
TOTAL EQUITY				3,192,713	6,167,052	4,534,340
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 2015
	CALLED UP SHARE CAPITAL	SHARE BASED  PAYMENT RESERVE		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)
Share based payments	-	329,000		-			-	-		-		329,000
Issue of share capital	377,136	-		-			-	12,685,796		-		13,062,932
Offset of share issue costs	-	-		-			--	(129,297)		-		(129,297)
Reorganisation of the Group	(564)	-		-			-	(5,358,015)		-		(5,358,579)
Offset of share issue costs	-	-		-			-	(1,332,712)		-		(1,332,712)
Reorganisation of the Group	-	-		-			-	-		5,133,062		5,133,062
Income statement	-	-		(2,963,223)			-	-		-		(2,963,223)
Balance as at 30 April 2014	377,029	329,000		(6,546,359)			-	8,515,773		5,133,062		7,808,505
Issue of share capital 8.12	200	-		-			-	143		-		343
Share based payment reserve release	-	(40,983)		40,983								-
Income statement	-	-		(3,256,005)			-	-		-		(3,256,005)
Currency Revaluation	-	-		-			(18,503)	-		-		(18,503)
Balance as at 30 April 2015	377,229	288,017		(9,761,381)			(18,503)	8,515,916		5,133,062		4,534,340
Income statement	-	-		(1,316,412)			-	-		-		(1,316,412)
Currency revaluation	-	-		-			(25,215)	-				(25,215)
Balance as at 31 October 2015	377,229	288,017		(11,077,793)			(43,718)	8,515,916		5,133,062		3,192,713
The notes are an integral part of these Unaudited Group Interim Financial Statements.

Unaudited Consolidation Statement of Cash Flows for the Period Ended 31 October 2015
	Unaudited	Unaudited	Audited
	6 months ended	6 months ended	Year ended
	31-Oct-15	31-Oct-14	30-Apr-15
	£	£	£
Cash flows used in operating activities
Cash generated from operations	(2,066,314)	(2,552,861)	(4,082,046)
Finance costs paid	-	-	-
Corporation tax received	-	-	150,880
Other comprehensive income	(25,215)	-	(18,503)
Net cash used in operating activities	(2,091,529)	(2,552,861)	(3,949,669)
Cash flows used in investing activities
Purchase of intangible fixed assets	-	(5,627)	(5,626)
Purchase of property, plant and equipment	(4,862)	(53,931)	(151,776)
Net cash used in investing activities	(4,826)	(59,558)	(157,402)
Cash flows generated from financing activities
New loans in year	-	-	-
Repayment of borrowings	-	(200,000)	(200,000)
Proceeds from share issuance	-	-	343
Cost of share insurance	-	-	-
Net Cash generated from financing activities	-	(200,000)	(199,657)
(Decrease)/increase in cash and cash equivalents	(2,096,355)	(2,812,419)	(4,306,728)
Cash and cash equivalents at beginning of period	4,712,730	9,019,458	9,019,458
Cash and cash equivalents at end of period	2,616,375	6,207,039	4,712,730

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 2015	31 October 2014		30 April 2015
	Notes	£	£		£
Loss before income tax		(1,316,412)	(1,684,322)		(3,478,221)
Share based payments		-	-		-
Depreciation charges	4	27,265	28,096		60,045
Loss on disposal of fixed assets		-	-		13,504
Amortisation charges	4	-	7,245		22,645
Finance income		1,023	(12,000)		-
Currency adjustment		1,037	(14,240)		-
		(1,287,087)	(1,675,221)		(3,382,027)
Decrease/(increase) in trade and other receivables		(407,386)	(195,771)		(489,655)
Increase in trade and other payables		(371,841)	(681,869)		(210,364)
Cash generated from operations		(2,066,314)	(2,552,861)		(4,082,046)
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 platform.

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 12th 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 2015 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 2016. 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 2015.

The financial information in this statement relating to the six months ended 31 October 2015 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The financial information for the period ended 31 October 2015 does not constitute the full statutory accounts for that period. The financial information in this statement relating to the six months ended 31 October 2014 has not been audited and does not constitute full statutory accounts for that period. The Annual Report and Financial Statements for 2015 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2015 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 2015.

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 2015
	UK		USA		Total
	£		£		£
Income
Total revenue	1,323,029		498,488		1,821,517
Total revenue from external customers	1,323,029		498,488		1,821,517
EBITDA	(1,404,870)		114,700		(1,290,170)
Depreciation	(27,265)		-		(27,265)
Amortisation	-		-		-
Operating loss	(1,432,135)		114,700		(1,317,435)
Finance income	1,023		-		1,023
Loss before income tax	(1,431,112)		114,700		(1,316,412)
Total assets	3,982,140		542,956		4,525,096
Total liabilities	(1,119,794)		(212,589)		(1,332,383)
Capital expenditure during the year
Intangible assets	-		-		-
Property, plant and equipment	4,826		-		4,826

	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

	Year ended 30 April 2015
	UK		USA		Total
	£		£		£
Income
Total revenue	2,025,918		800,116		2,826,034
Total revenue from external customers	2,025,918		800,116		2,826,034
EBITDA	(3,269,400)		(154,818)		(3,424,218)
Depreciation	(60,045)		-		(60,045)
Amortisation	(22,645)		-		(22,645)
Exceptional items	-		-		-
Operating loss	(3,352,090)		(154,818)		(3,506,908)
Finance income	28,687		-		28,687
Loss before income tax	(3,323,403)		(154,818)		(3,487,221)
Total assets	5,618,671		619,893		6,238,564
Total liabilities	(1,372,982)		(331,242)		(1,704,224)
Capital expenditure during the year
Intangible assets	5,626		-		5,626
Property, plant and equipment	151,766		-		151,766

5.   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 2015	31 October 2014	30 April 2015
	£	£	£
Loss for the period attributable to the owners of the parent	(1,316,412)	(1,615,211)	(2,963,223)
Weighted average number of ordinary shares	75,445,814	75,405,814	75,421,595
	Pence	Pence	Pence
Basic and diluted loss per share: ordinary shareholders	1.74	2.14	4.34

Earnings per share has been calculated in accordance with IAS 33.

6.      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 2015.

This information is provided by RNS

The company news service from the London Stock Exchange

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