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DOTDIGITAL GROUP PLC — Earnings Release 2021
Nov 16, 2021
7604_er_2021-11-16_ac2701d6-00c4-445a-810e-fbb011984df2.html
Earnings Release
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dotDigital Group plc
16 November 2021
Dotdigital Group plc ("Dotdigital" or the "Group") Final Results for the year ended 30 June 2021
Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, announces its final audited results for the year ended 30 June 2021 ("FY21").
Financial Highlights
- Organic revenue growth of 23% to £58.1m (FY20: £47.4m)
- Recurring revenue as a percentage of total revenue increased to 93% (FY20: 91%)
- Monthly ARPC¹ increased 16% to £1,251 (FY20: £1,083 per month)
- Adjusted EBITDA² grew 9% to £19.8m (FY20: £18.2m) and adjusted operating profit³ grew 5% to £13.7m (FY20: £13.1m)
- Adjusted EPS from continuing operations was 4.06p (FY20: 3.90p)
- Strong net cash balance at 30 June 2021 of £32.0m (30 June 2020: £25.4m)
- The Board proposes to pay a final dividend of 0.86p per ordinary share, in line with its progressive dividend policy (FY20: 0.83p)
Operational Highlights
- Acceleration of marketing digital transformation spurred by pandemic, driving significant increase in omnichannel offering, particularly SMS
- Organic international revenue increased 22% to £18.0m (FY20: £14.8m), with international sales representing 31% of total sales (FY20: 31%)
- APAC region delivered highest growth at 47%, albeit from a smaller base
- Strong demand from UK customers for multi-channel functionality
- Revenue through connectors into strategic partners grew 14% to £25.4m (FY20: £22.3m), evidencing strength of relationships and continued refinement of joint go-to-market strategies
- Product innovation continues to drive value with functionality recurring revenue (from license fees and enhanced bolt-on functionality) up 31% to £18.9m (FY20: £14.4m)
- Continued focus on operational excellence in areas of privacy, security and sustainability
- First customer engagement platform awarded ISO27701 on privacy information management, ISO27001 information security management and ISO14001 environment management certifications
Outlook
- Normalisation of trading environment continues with transition out of global lockdowns; Board continues to assess potential varied effects across broad and diversified customer base
- High level of confidence in delivery of management expectations for the new financial year following a strong start
Milan Patel, CEO of Dotdigital, commented: "We are pleased to report a record year for Dotdigital, delivering double digit organic growth and enhanced profitability as a result of an accelerated uptake of our omnichannel offering. This performance is testament to our robust business model, as we navigated and supported our customers through the pandemic, and the efforts of our talented and dedicated team.
"The investments we have made in our Engagement Cloud platform, international hubs and partner network are bearing fruit. Our powerful data-driven marketing automation platform continues to excel in the market as a result of its feature-rich yet user-friendly functionality, and we are well positioned to support a growing number of customers as they look to drive deeper, more personal engagement with their consumers through digital marketing.
"As we enter the new year, trading remains strong. Our healthy balance sheet, strong recurring revenues and cash generation provides the flexibility to invest in our growth strategy, giving the Board confidence in the Group's long-term prospects."
Investor Presentation: https://www.dotdigitalgroup.com/events-presentations/
Investor Video: A highlights video is available to watch here: https://bit.ly/DOTD_FY21_overview
Notes
- ARPC means Average Revenue Per Customer (including new customers added in period and existing customers)
- EBITDA is earnings before interest, tax, depreciation and amortisation and adjusted for acquisition costs and share-based payments
- Operating profit is adjusted for acquisition costs and share-based payments
For further information please contact:
Dotdigital Group Plc
Tel: 020 3953 3072
Milan Patel, CEO
[email protected]
Paraag Amin, CFO
Alma PR (Financial PR)
Tel: 020 3405 0210
Hilary Buchanan
[email protected]
David Ison
Faye Calow
Canaccord Genuity (Nominated Advisor and Joint Broker)
Tel: 020 7523 8000
Bobbie Hilliam
Georgina McCooke
Jonathan Barr, Sales
finnCap (Joint Broker)
Tel: 020 7220 0500
Stuart Andrews, Corporate Finance
Rhys Williams, Sales
Singer Capital Markets (Joint Broker)
Tel: 020 7496 3000
Shaun Dobson, Head of Corporate Finance
Alex Bond, Corporate Finance
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
CHAIRMAN'S STATEMENT
Overview
To have delivered our strongest year to date amid pandemic-related challenges, while managing a pronounced increase in the uptake of newer channels beyond email, is testament to the exceptional people at Dotdigital. The effectiveness of our model and the continued desirability of our product are evident in the numbers, but without the hard work and adaptability of our teams, we would not have been able to record such a positive performance. On behalf of the Board, I would like to thank everyone involved in the business for their contributions.
After a period of disruption in Q4 of the previous financial year, we have gone from strength to strength, facilitated by the acceleration of digital transformation brought about by the pandemic. While the mix of channel usage varied as our customers' circumstances changed and evolved, we saw consistent levels of overall demand, aided by the diversity of sectors and locations across our customer base. This was achieved while helping our customers that struggled where we could.
Although restrictions are easing and vaccination programmes are under way in most territories, Covid-19 will continue to be a risk factor for the foreseeable future, and not all its after effects will be easy to foresee. We therefore need to continue to monitor its impact on our customer base, and be ready to respond accordingly. That said, we have traded well since the onset of the pandemic, proving that the inherent versatility of our offering means we can help organisations, in both good and more challenging times. As we emerge from the worst of the pandemic and with a robust model and strong financial position, I am confident that if we continue to support our customers and execute our strategy in a measured and purposeful way, we will remain on course to meet our growth ambitions.
Strategic Progress
This financial year saw a significant increase in appetite for our omni-channel offering, with SMS proving particularly popular and more and more organisations choosing to use push messaging, social, WhatsApp for business and live chat, in line with the growing demand among consumers for alternative and more personal means of engagement. The team has built an advanced data-led platform that is tailored to the increasingly sophisticated needs of the modern marketeer and continues to do an excellent job of penetrating international markets, with all three of our regions demonstrating good levels of growth in the year. Performance in APAC was particularly strong, supplemented by the growing conversion of pipelines in new markets such as Japan.
Our relationships with strategic partners - a key route to market for Dotdigital - have deepened considerably, enabling better collaboration in driving awareness and ultimately sales across their customer bases. As a result, we saw encouraging growth in revenue from Magento, Shopify, BigCommerce and Microsoft Dynamics - our four most valuable partnerships. On the product front, we have continued to focus on building out our data and personalisation capabilities, and firmly believe we now have one of the most powerful, feature-packed and yet easy-to-use marketing automation platforms, capable of delivering unparalleled insight and strong return on investment without the need for a high level of technical expertise.
Sustainability
At the end of 2020, we set out to broaden and accelerate sustainability improvements throughout the organisation with a view to reducing the impact of our operations on the environment. Known internally as the 'dotgreen' initiative, it marked the point where sustainability was elevated from being an important consideration to a guiding principle for everything we do. In the time since, our teams have worked tirelessly to make our infrastructure and working practices more environmentally friendly. I am pleased to report that, as a result, we can now claim to be the world's first carbon-neutral marketing automation platform. We also obtained ISO 14001, the universally recognised certification awarded to organisations that meet a high standard of environmental management, became a Corporate Member of the Woodland Trust and, most recently, signed the Terra Carta, a part of HRH The Prince of Wales' Sustainable Markets Initiative that offers the basis of a recovery plan to 2030 with nature, people and planet at its heart.
In a relatively short space of time and against the backdrop of a pandemic, we have made significant, meaningful changes to become a more responsible business. While we are proud of our achievements, we know there is still room for improvement, and remain committed to driving further change to ensure we play our part in safeguarding the future of our planet.
People
Our people are the lifeblood of Dotdigital.# Dotdigital Group plc Annual Report and Accounts 2021
Ensuring we have the right balance of technological prowess, interpersonal skills and commercial acumen across our organisation is vital to the delivery of our strategy, and to that end we continued to strengthen our workforce in the period. Most notably, our sales function grew and became more specialised to meet the growing demand for our product, and we bolstered our marketing and customer care teams with the internal promotion of a new Global Vice President of Marketing and the external appointment of a new Head of Customer Success EMEA from a leading competitor. As we move through the new financial year, we will continue to hire high-quality individuals that bring new skills and experience into the Group while increasing management bandwidth where necessary to enable us to reach our strategic goals more efficiently. At the same time, we will continue to invest in our existing colleagues, cementing Dotdigital as one of the best places to work in the industry from both a development and quality of life perspective.
Dividend
The Board has agreed to maintain a progressive dividend in line with Group EBITDA growth. Therefore, subject to approval at the AGM in December 2021, the Board proposes that the Group will pay a final dividend of 0.86p per ordinary share (FY20: 0.83p).
Michael O'Leary
Non-Executive Chairman
16 November 2021
CHIEF EXECUTIVE OFFICER'S REPORT AND FINANCIAL REVIEW
Overview
I am pleased to report on a record year for Dotdigital, delivering our strongest financial performance to date and demonstrating the solidification of our transformation to an omni-channel platform. This positive performance has been achieved in what has been a turbulent environment as a result of the Covid-19 pandemic, testing both our customers and our own resilience. We are the strong business we are today because of our passionate team who continued to innovate and stay motivated, supporting our customers through difficult times and taking our business forward to new heights. Backed by our solid financial footing, we did not have any staff on furlough and we continued to add to our teams across our global regional operations.
During the year we saw increased uptake of our digital marketing platform, from both new and existing customers, resulting in organic revenue growth of 23% to £58.1m (FY20: £47.4m) and adjusted EBITDA growth of 9% to £19.8m (FY20: £18.2m). The translation of this financial performance into platform volume growth demonstrates the scale of the Group's reach: 24 billion emails were sent via the platform, an increase of 15% YoY, complemented by an increased uptake of other channels including mobile messages, with a strong 28% YoY uplift in SMS, taking the total number of SMS sent to 665 million (FY20: 520 million). Underpinning this growth is the Group's recurring SaaS model, with 93% of total revenue comprising of recurring revenue.
The Group is cash generative and maintains a strong balance sheet, with no debt and net cash balances of £32.0m at year end (FY20: £25.4m), giving the Group visibility and scope to continue to invest in order to drive long-term, sustainable growth. We continued to enhance our platform functionality during the year with a focus on driving greater data and automation capabilities. Recurring revenues derived from enhanced product functionality grew by 31% to £18.9m (FY20: £14.4m), demonstrating the value derived from our customer-centric R&D programme. We remain committed to our responsibility and sustainability ethos by ensuring that all our stakeholders, including employees, partners and the broader community, are central to our decision making. We have made significant strides against this agenda, recognising that we will always be pushing for better.
The digital transformation of marketing operations across all sectors is happening at pace, and we saw an acceleration of this during the year as businesses turned to digital as the primary means of engaging with existing and prospective customers. Our powerful data-driven platform is delivering results at scale, supported by a diversified customer base with broad sector exposure and providing us with a significant opportunity to continue our growth ambitions.
Business Review
Dotdigital is focused on empowering marketers to connect with customers through its powerful automation platform that unifies all digital channels. Our Engagement Cloud provides the tools to allow marketing teams to launch highly targeted and relevant campaigns to customers and prospects with personalised engagement at every touchpoint - the right message, at the right time, through the right channel. The result is faster and more effective marketing campaigns with increased engagement and demonstrable ROI.
The use cases of the Group's offering are wide and global, however the Group remains focused on mid-market and enterprise clients across target verticals including retail, non-profit, education, financial services and travel. The Group's foundations and particular strengths are in email and deep integrations into strategic partners within e-commerce and CRM.
Market
The digital transformation of the marketing industry continues to progress, with digital marketing budgets increasingly taking share of overall marketing budgets. The pace of this transition accelerated in the lockdown environment as organisations had no alternative but to engage with their end users via digital channels. As we move through various stages of lockdown easing across our global operations, the allocation of channels varies but the overall shift continues its course.
With the rise of digital marketing, the sophistication of marketeers has also increased. We've seen a greater emphasis on data and personalisation by our customers and our platform is assisting in reducing the gap between marketeers' aspirations and the reality of what they can achieve through our platform. One result is an increasing trend towards direct-to-consumer engagement. Through our platform, brands can devise more informed marketing strategies with actionable insights and analytics that help them develop a deeper understanding of their end customer and drive a positive ROI.
Growth Strategy
Dotdigital's organic growth strategy continues to be focused around its three core pillars: geographic, product innovation and strategic partnerships.
Three Growth Pillars
1. Geographic
Despite the wider economic impact of Covid-19, all key global regions achieved strong revenue growth in the period, continuing Dotdigital's diversification of international exposure. This growth continues to be evident in that revenue from outside the UK was 31% of Group revenue for the year. We expect to continue this growth as we invest further in our key international regions. We saw strong demand for our multichannel functionality from our UK customers which we expect to continue, although it will be surpassed by growth in our international markets.
International expansion is a key tenet of our growth strategy and has been a significant area of investment in the period. We have strengthened our presence and enhanced our prospects across our key territories as reflected in the growth across our key international regions. We expect to further build on this momentum and continue organic growth as we move into FY22 and beyond.
EMEA
Revenues were up by 23% to £44.6m compared to £36.3m for the same period in FY20. We saw a normalisation of sales cycles in the region, particularly in the second half of the year, as pandemic restrictions broadly began to ease in this region. We have also seen an uptick in momentum both from a pipeline and sales conversion perspective and expect to see this trend continue as lockdown measures across the region continue to ease. Take-up of omnichannel marketing solutions was strong in this region, particularly with SMS, driven by strong demand from our customers in the education and healthcare sectors as they accelerated their adoption of online tools to engage with their customer base during the pandemic.
North America
Revenues for North America were up 19% to US$12.5m compared to US$10.5m for FY20. This was driven by new customer wins, reflecting our growing brand awareness in this region. North America presents the largest market opportunity for the Group, and we expect to increase our investment in this region to solidify our foundations to capture more opportunities. Our focus remains on growing and cementing relationships with partners and customers to help us build our presence while increasing brand awareness. In addition, we will invest in strengthening the customer facing teams and bolster the management structure in this region through creating an additional layer to create bandwidth and scale.
APAC
The APAC region delivered the highest growth in revenue in the year, albeit from a smaller base, as revenues were up 47% to A$7.7m vs A$5.2m in FY20, evidencing Dotdigital's increasing presence in this region and reflecting previous periods of investment. We increased our investment in this market in the period through expanding the team further into Asia. We remain mindful of the ongoing challenges in the region as a result of the Covid-19 lockdown which presents a degree of uncertainty for our end customers, however we see a strong pipeline of opportunities in Japan and the Far East, through our team based in Singapore.
2. Product innovation
The rate at which the platform is developing means it continues to be at the forefront of the customer engagement category. Recurring revenue from enhanced product functionality and upgrades, taken by both existing and new customers, increased by 31% to £18.9m in the period vs £14.4m in FY20, illustrating continued growth in the number of customers using our enhanced functionality, including an increasing number of data connectors through our IPaaS (Integrations Platform as a Service) capabilities.# Financial Review
We have continued to educate the market through live online sessions and digital marketing content on how to adopt new features to enhance messaging. The platform continues to go from strength to strength, differentiated by our offering of an in-house platform and automation tools across all channels. The competitive advantage of our offering and our ability to deliver on the needs of our customers is evidenced in our strong performance this year and the increased uptake of multichannel solutions by existing and new customers alike. As we go into the new financial year the focus will be on platform adoption from the additional functionality added in the period. Customer-centred R&D investment in the period was £6.8m compared to £6.5m in FY20, consistent with management expectations. We continued to execute against our product strategy and our roadmap has continued to develop as anticipated. Our focused areas of innovation are:
- Data and intelligence - joining all data together to create a single customer view and help our customers better target their campaigns from a personalisation perspective. We have dedicated a great deal of resource to this in response to increasingly sophisticated customer requirements and will continue to do so with further upgrades to the platform.
- Marketing automation - harnessing artificial intelligence and machine learning across targeted parts of the platform's architecture. This included the launch of sector-tailored product packages for commerce customers and enhanced product recommendations capabilities.
- Building out further omnichannel functionality - to assist businesses through the full customer journey at every touch point. This included the launch of a new live chat solution through the Engagement Cloud and additional SMS capabilities, with an increase in take-up of both in the period.
Developing strategic partnerships
We have continued to invest in all our strategic partner relationships, which are a key aspect of our growth strategy as they help us to raise brand awareness, in the regions and verticals in which we operate. Revenue through connectors into strategic partners was up 14% to £25.4m vs £22.2m in FY20, evidencing the progress we have made in developing our relationships with strategic partners and refining our joint go-to-market strategies. Continued growth in the Magento space was driven by enhanced brand awareness coupled with the additional functionality that we have developed for e-commerce merchants. Sign-up of customers in all regions remains strong, with a net new 66 Magento customers joining the platform in the period, taking the total number to 782. Revenue from Magento customers grew 11% to £14.3m from £13.0m in FY20 and we look forward to the continued collaboration between our respective teams to advance our joint marketing strategy and to enhance development of our integration. At the end of the financial year, we had 132 customers using the Shopify connector compared to 83 this time last year, supporting the continued strength of our relationship with this partner. Revenue from Shopify customers grew 79% to £2.1m from £1.2m last year as we saw an increasing pipeline of new customers from the integration, built with Shopify Flow, which allows e-commerce merchants a seamless connection to easily deploy campaigns from the Dotdigital platform. We saw a 249% increase in revenue from BigCommerce connected customers in the year to £0.4m from £0.1m. As BigCommerce's global elite partner through the period, we continue to deepen our strategic relationship, formulating a joint go-to-market plan through offers for e-commerce merchants, and joint efforts to the user. This plan will enable us to increase our addressable market across all regions, and we are already seeing an increasing demand to use the integration as a result. As evidence of our commitment to our B2B Marketing customers, we hired a partner manager to build our strategic relationship with Microsoft for our integration into Dynamics 365 in North America. Revenues from customers using our Dynamics connector increased 12% to £4.3m in the year vs £3.8m in FY20; we believe that this significant opportunity to develop a meaningful partnership with a major North American player has only begun to be recognised and we look forward to building on this relationship in future. Building on our integration success, we have created a repeatable blueprint for building integrations into the wider connected ecosystem faster and more agile than before. Most recently, we launched integrations into Shopware 6, Google Sheets, Eventbrite and Typeform, with more planned on the roadmap for FY22.
M&A
To support the Group's organic growth strategy, the Board continues to evaluate the market for complementary acquisitions, backed by the Group's robust financial position. The Board's acquisition strategy is focused on set criteria, being: synergy technology for new revenue streams; bolt-on functionality to accelerate platform development, new talent acquisition and the expansion of expertise, and extension of the customer base in strategic territories.
FINANCIAL REVIEW
Revenues
The Group achieved continuing operations revenue growth of 23% (FY20: 12%), which delivered record overall revenues of £58.1m, driven in particular by an increased volume of ARN (alerts, reminders and notifications) SMS messaging, as the effects of the pandemic continued throughout our financial year. Recurring revenues comprise 93% of the total, whilst international revenues continue to account for 31% of the total (FY20: 31%).
Business model
The Group generates the majority of its revenues from annual message plans which are recognised equally over the life of the contract. In addition, we sell upgrade packages to customers allowing them to use additional modules and features of our platform. For more sophisticated customers we offer customised functionality and integrations so that they can maximise the use of their customer data. We also have professional services contracts which are recognised as revenue as the work is performed. Over the past year we have built other messaging channels into our core platform, including SMS and Live Chat, and access to these channels are sold separately.
Gross margin
The gross margin for the period for continuing operations was 82% (FY20: 92%). Whilst the gross margin for email and standard channels remained above 90%, the decline in overall group gross margin comes from the growth of premium messaging channels, (routing purchased via a third party on a per message basis), such as SMS.
Operating expenses
Adjusted operating profit from continuing operations grew by 5% from £13.1m to £13.7m. Operating expenses as a percentage of revenues dropped from 64% to 59%, reflecting some investment back into the business. The Group continues to invest in people in the areas of development, sales and marketing, particularly within the high-growth global offices, to continue enhancing and adding to the product suite.
Balance sheet
There was strong cash management in the year with net cash generated from continuing operations of £20.7m (FY20: £18.2m). The cash balance at the end of the period was £32.0m (FY20: £25.4m). The Group continues to be debt free and maintains a healthy balance sheet. A combination of a highly efficient cash collection process and an incentivisation push to move more customers onto Direct Debit and other automated payment collection methods helped with the year-end position. Trade receivables have only grown by 5% in the year, reflecting revenue growth and good cash management. Overall receivables have grown 3% due to the deferment of marketing expenditure such as trade shows and conferences, which have been postponed due to the pandemic, and related deferred commission on the sale of our products. The Group continues to invest heavily in the platform to increase functionality around marketing automation, increasing the number of messaging channels and surfacing data and providing insights for our customers to provide excellent customer engagement. This continued investment is demonstrated by the increase in product development to £6.8m (FY20: £6.5m).
Tax
Profitability from continuing operations continues to grow. This is reflected within the tax charge, which is now £1.0m with an effective tax rate of 8%, with a lower than standard rate due to enhanced R&D tax credits.
EPS
In the year the continued operations adjusted basic EPS increased to 4.12p (FY20: 3.95p) and adjusted diluted EPS increased to 4.06p (FY20: 3.90p), despite the higher effective tax rate of 8%, (FY20: 5%). Basic EPS also increased to 3.85p (FY20: 3.68p).
Dividend policy
As announced last year, the Board conducted its review of its organic business plan for the following three years. This included evaluating the cash needs required for opportunities in organic growth to increase shareholder value and capital expenditure. The Board decided that it will continue to keep a progressive dividend in line with EBITDA growth. Therefore, subject to approval at the AGM in December 2021, the Board proposes that the Group will pay a final dividend of 0.86 pence per ordinary share (FY20: 0.83p), to be payable at the end of January 2022.
Current Trading and Outlook
During the year the Group has significantly advanced its omni-channel marketing platform vision with strategic progress against all tenants of our growth strategy, delivering a record financial performance. We have progressed our geographic expansion with stronger market presence in North America, EMEA and APAC; our strategic partner relations have deepened with better collaboration in driving brand awareness to our end markets; and we've added new capabilities to our platform to drive broader customer engagement. The focus remains in driving an increased adoption of functionality within the platform.As we enter the new year, we do so within a more normalised trading environment as our end markets transition out of the immediate implications from the pandemic. Trading remains in line with management expectation and our technology platform is uniquely positioned to capture the transition to online marketing across the mid-tier enterprise space. Whilst we remain mindful of the wider economic uncertainty, our healthy balance sheet, strong recurring revenues and cash generation provides the flexibility to invest in our growth strategy. The Board is therefore confident in the Group's long-term growth prospects.
Milan Patel
Chief Executive Officer
16 November 2021
Paraag Amin
Chief Financial Officer
16 November 2021
DOTDIGITAL GROUP PLC CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2021
| 30.6.21 Restated | 30.6.20 | ��'000 | ��'000 | |
|---|---|---|---|---|
| Notes | ||||
| CONTINUING OPERATIONS | ||||
| Revenue from contracts with customers | 58,124 | 47,404 | ||
| Cost of sales | (10,356) | (3,899) | 6 | |
| Gross profit | 47,768 | 43,505 | ||
| Administrative expenses | (34,089) | (30,443) | 6 | |
| OPERATING PROFIT FROM CONTINUING OPERATIONS PRE SHARE-BASED PAYMENTS AND EXCEPTIONAL COSTS | 13,679 | 13,062 | ||
| Share based payments | (625) | (682) | 25 | |
| Exceptional costs | (188) | (136) | 4 | |
| OPERATING PROFIT FROM CONTINUING OPERATIONS | 12,866 | 12,244 | ||
| Finance costs | (74) | (98) | 5 | |
| Finance income | 20 | 40 | 5 | |
| PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS | 12,812 | 12,186 | 6 | |
| Income tax expense | (1,322) | (1,219) | 7 | |
| Profit for the year from continuing operations | 11,490 | 10,967 | ||
| Loss for the year from discontinuing operations | (899) | (378) | 10 | |
| Profit for the year attributable to the owners of the parent | 10,591 | 10,589 | ||
| Earnings per share from all operations (pence per share) | ||||
| Basic | 3.55 | 3.55 | 9 | |
| Diluted | 3.50 | 3.50 | 9 | |
| Adjusted Basic | 3.82 | 3.95 | 9 | |
| Adjusted Diluted | 3.76 | 3.90 | 9 | |
| Earnings per share from continuing operations (pence per share) | ||||
| Basic | 3.85 | 3.68 | 9 | |
| Diluted | 3.79 | 3.63 | 9 | |
| Adjusted Basic | 4.12 | 3.95 | 9 | |
| Adjusted Diluted | 4.06 | 3.90 | 9 | |
| Earnings per share from discontinued operations (pence per share) | ||||
| Basic | (0.30) | (0.13) | 9 | |
| Diluted | (0.30) | (0.13) | 9 | |
| Adjusted Basic | (0.30) | (0.00) | 9 | |
| Adjusted Diluted | (0.30) | (0.00) | 9 |
DOTDIGITAL GROUP PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021
| 30.6.21 Restated | 30.6.20 | ��'000 | ��'000 | |
|---|---|---|---|---|
| PROFIT FOR THE YEAR | 10,591 | 10,589 | ||
| OTHER COMPREHENSIVE INCOME | ||||
| Items that may be subsequently reclassified to profit or loss: | ||||
| Exchange differences on translating foreign operations | (87) | 34 | ||
| Total comprehensive income attributable to: | ||||
| Owners of the parent | 10,504 | 10,623 | ||
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR | ||||
| Comprehensive income from continuing operations | 11,403 | 11,001 | ||
| Comprehensive loss from discontinued operations | (899) | (378) |
DOTDIGITAL GROUP PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 JUNE 2021
| 30.6.21 Restated | 30.6.20 Restated | 30.6.19 | ��'000 | ��'000 | ��'000 | |
|---|---|---|---|---|---|---|
| Notes | ||||||
| ASSETS | ||||||
| NON-CURRENT ASSETS | ||||||
| Goodwill | 9,680 | 9,680 | 9,680 | 11 | ||
| Intangible assets | 16,134 | 14,059 | 11,702 | 12 | ||
| Property, plant and equipment | 3,972 | 5,262 | 1,037 | 13 | ||
| 29,786 | 29,001 | 22,419 | ||||
| CURRENT ASSETS | ||||||
| Trade and other receivables | 13,350 | 12,987 | 12,222 | 14 | ||
| Cash and cash equivalents | 31,951 | 25,383 | 19,320 | 15 | ||
| 45,301 | 38,370 | 31,542 | ||||
| TOTAL ASSETS | 75,087 | 67,371 | 53,961 | |||
| EQUITY | ||||||
| ATTRIBUTABLE TO THE OWNERS OF THE PARENT | ||||||
| Called up share capital | 1,494 | 1,493 | 1,490 | 16 | ||
| Share premium | 7,124 | 6,967 | 6,791 | 17 | ||
| Reverse acquisition reserve | (4,695) | (4,695) | (4,695) | 17 | ||
| Other reserves | 3,066 | 1,600 | 910 | 17 | ||
| Retranslation reserve | (37) | 50 | 16 | 17 | ||
| Retained earnings | 54,081 | 45,655 | 36,971 | 17 | ||
| TOTAL EQUITY | 61,033 | 51,070 | 41,483 | |||
| LIABILITIES | ||||||
| NON-CURRENT LIABILITIES | ||||||
| Lease liabilities | 2,489 | 3,399 | - | 19 | ||
| Deferred tax | 1,207 | 1,983 | 1,377 | 21 | ||
| 3,696 | 5,382 | 1,377 | ||||
| CURRENT LIABILITIES | ||||||
| Trade and other payables | 9,334 | 9,796 | 11,096 | 18 | ||
| Financial liabilities: | ||||||
| - Interest bearing loans and borrowings | - | - | 5 | |||
| - Lease liabilities | 934 | 1,068 | - | 19 | ||
| Current tax payable | 90 | 55 | - | |||
| 10,358 | 10,919 | 11,096 | ||||
| TOTAL LIABILITIES | 14,054 | 16,301 | 12,478 | |||
| TOTAL EQUITY AND LIABILITIES | 75,087 | 67,371 | 53,961 |
DOTDIGITAL GROUP PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021
| Called up share capital | Retained earnings | Share premium | |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | |
| Balance as at 1 July 2019, as previously reported | 1,490 | 37,161 | 6,791 |
| Impact of correction of errors (note 30) | - | (190) | - |
| Restated balance at 1 July 2019 | 1,490 | 36,971 | 6,791 |
| Transactions with owners (restated) | |||
| Issue of share capital | 3 | 176 | - |
| Dividends | - | (1,996) | - |
| Adjustments in relation to IFRS 16 | - | 61 | - |
| Transfer in reserves | - | 30 | - |
| Deferred tax on share options | - | - | - |
| Share-based payments | - | - | - |
| Transactions with owners (restated) | 3 | (1,905) | 176 |
| Total comprehensive income (restated) | |||
| Profit for the year | - | 10,589 | - |
| Other comprehensive income | - | - | - |
| Total comprehensive income (restated) | - | 10,589 | - |
| Restated balance as at 30 June 2020 | 1,493 | 45,655 | 6,967 |
| Balance as at 1 July 2020 | 1,493 | 45,655 | 6,967 |
| Issue of share capital | 1 | 157 | - |
| Dividends | - | (2,472) | - |
| Transfer in reserves | - | 307 | - |
| Deferred tax on share options | - | - | - |
| Share-based payments | - | - | - |
| Transactions with owners | 1 | (2,165) | 157 |
| Profit for the year | - | 10,591 | - |
| Other comprehensive income | - | - | - |
| Total comprehensive income | - | 10,591 | - |
| Balance as at 30 June 2021 | 1,494 | 54,081 | 7,124 |
DOTDIGITAL GROUP PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021 CONTINUED
| Retranslation reserve | Reverse acquisition reserve | Other reserves | Total equity | |
|---|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 | |
| Balance as at 1 July 2019, as previously reported | 16 | (4,695) | 720 | 41,483 |
| Impact of correction of errors (note 30) | - | - | 190 | - |
| Restated balance at 1 July 2019 | 16 | (4,695) | 910 | 41,483 |
| Transactions with owners (restated) | ||||
| Issue of share capital | - | - | - | 179 |
| Dividends | - | - | - | (1,996) |
| Adjustments in relation to IFRS 16 | - | - | - | 61 |
| Transfer in reserves | - | - | (30) | - |
| Deferred tax on share options | - | - | 38 | 38 |
| Share-based payments | - | - | 682 | 682 |
| Transactions with owners (restated) | - | - | 690 | (1,036) |
| Total comprehensive income (restated) | ||||
| Profit for the year | - | - | - | 10,589 |
| Other comprehensive income | 34 | - | - | 34 |
| Total comprehensive income (restated) | 34 | - | - | 10,623 |
| Restated balance as at 30 June 2020 | 50 | (4,695) | 1,600 | 51,070 |
| Balance as at 1 July 2020 | 50 | (4,695) | 1,600 | 51,070 |
| Issue of share capital | - | - | - | 158 |
| Dividends | - | - | - | (2,472) |
| Transfer in reserves | - | - | (307) | - |
| Deferred tax on share options | - | - | 1,148 | 1,148 |
| Share-based payments | - | - | 625 | 625 |
| Transactions with owners | - | - | 1,466 | (541) |
| Profit for the year | - | - | - | 10,591 |
| Other comprehensive income | (87) | - | - | (87) |
| Total comprehensive income | (87) | - | - | 10,504 |
| Balance as at 30 June 2021 | (37) | (4,695) | 3,066 | 61,033 |
- Share capital is the amount subscribed for shares at nominal value.
- Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
- Share premium represents the excess of the amount subscribed for share capital over the nominal value net of the share issue expenses.
- Retranslation reserve relates to the retranslation of foreign subsidiaries into the functional currency of the Group.
- The reverse acquisition reserve relates to the adjustment required to account for the reverse acquisition in accordance with International Financial Reporting Standards.
- Other reserves relate to the charge for the share-based payment in accordance with IFRS 2and the transfer on the exercise or lapsing of share options.
DOTDIGITAL GROUP PLC CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021
| 30.6.21 | 30.6.20 | ��'000 | ��'000 | |
|---|---|---|---|---|
| Notes | ||||
| Cash flows from operating activities | ||||
| Cash generated from operations | 17,969 | 15,907 | 26 | |
| Tax paid | (975) | (124) | ||
| Net cash generated from all operating activities | 16,994 | 15,783 | ||
| Net cash generated from continuing operating activities | 20,710 | 18,214 | ||
| Net cash used in discontinued operating activities | (3,716) | (2,431) | ||
| Cash flows from investing activities | ||||
| Purchase of intangible fixed assets | (6,870) | (6,505) | ||
| Purchase of property, plant and equipment | (169) | (277) | ||
| Proceeds from sale of property, plant and equipment | 2 | - | ||
| Interest received | 20 | 40 | ||
| Net cash flows used in investing activities | (7,017) | (6,742) | ||
| Net cash used in from continuing investing activities | (7,017) | (6,741) | ||
| Net cash used in discontinued investing activities | - | (1) | ||
| Cash flows from financing activities | ||||
| Equity dividends paid | (2,472) | (1,996) | ||
| Payment of lease liabilities | (1,182) | (1,127) | ||
| Proceeds from share issues | 158 | 179 | ||
| Net cash flows used in financing activities | (3,496) | (2,944) | ||
| Net cash used in continuing financing activities | (3,446) | (2,884) | ||
| Net cash used in discontinued financing activities | (50) | (60) | ||
| Increase in cash and cash equivalents | 6,481 | 6,097 | ||
| Cash and cash equivalents at beginning of year | 25,383 | 19,320 | 27 | |
| Effect of foreign exchange rate changes | 87 | (34) | ||
| Cash and cash equivalents at end of year | 31,951 | 25,383 | 27 |
DOTDIGITAL GROUP PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
1. GENERAL INFORMATION
Dotdigital Group Plc ("Dotdigital") is a public limited company incorporated in England and Wales and quoted on the AIM Market.
2. SEGMENTAL REPORTING
Dotdigital's single line of business remains the provision of data-driven omni-channel marketing automation. The chief operating decision maker considers the Group's segments to be by geographical location, this being EMEA, US and APAC operations and by business activity, this being core Engagement Cloud and CPaaS as shown in the tables that follow:
Geographical revenue and results (from all operations)
| EMEA | US | APAC | Total | |
|---|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 | |
| Income statement | ||||
| Revenue | 47,024 | 9,264 | 4,262 | 60,550 |
| Gross profit | 36,878 | 8,241 | 3,864 | 48,983 |
| Profit/(loss) before income tax | 11,699 | 609 | (294) | 12,014 |
| Total comprehensive income attributable to the owners of the parent | 10,436 | 379 | (311) | 10,504 |
| Financial position | ||||
| Total assets | 71,566 | 3,098 | 423 | 75,087 |
| Net current assets/(liabilities) | 33,942 | 1,387 | (386) | 34,943 |
Revenue from external customers is attributed to the geographical segments noted above based on the customers' location. There were no customers who account for more than 10% of revenue (2020: none).All revenue is from contracts signed with new customers and upgrades and additional functional recurring revenue sold to existing contracted clients. Revenue from contracts is recognised under percentage of completion method based on a percentage of services performed to date as a percentage of the total services to be performed.
Business activity revenue and results
30.6.2020
| EMEA | US | APAC | Total |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 |
| Income statement | |||
| Revenue | 43,810 | 8,325 | 2,777 |
| Gross profit (restated* see note 30) | 35,181 | 7,420 | 2,496 |
| Profit/(loss) before income tax | 11,256 | 598 | (46) |
| Total comprehensive income attributable to the owners of the parent (restated** see note 30) | 10,429 | 291 | (97) |
| Financial position | |||
| Total assets | 60,959 | 4,846 | 1,566 |
| Net current assets/(liabilities) (restated** see note 30) | 26,915 | 1,006 | (470) |
Revenue from external customers is attributed to the geographical segments noted above based on the customers' location. There were no customers who account for more than 10% of revenue (2019: none). All revenue is from contracts signed with new customers and upgrades and additional functional recurring revenue sold to existing contracted clients. Revenue from contracts is recognised under percentage of completion method based on a percentage of services performed to date as a percentage of the total services to be performed.
30.6.2021
| Core | CPaaS | Total |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| Income statement | ||
| Revenue | 58,124 | 2,426 |
| Gross profit | 47,768 | 1,215 |
| Profit/(loss) before income tax | 12,812 | (798) |
| Total comprehensive income attributable to the owners of the parent | 11,403 | (899) |
| Financial position | ||
| Total assets | 74,976 | 111 |
| Net current assets/(liabilities) | 34,974 | (31) |
30.6.2020
| Core | CPaaS | Total |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| Income statement | ||
| Revenue | 47,404 | 7,508 |
| Gross profit (restated* see note 30) | 43,505 | 1,592 |
| Profit/(loss) before income tax | 12,186 | (378) |
| Total comprehensive income attributable to the owners of the parent (restated** see note 30) | 11,001 | (378) |
| Financial position | ||
| Total assets | 65,114 | 2,257 |
| Net current assets/(liabilities) (restated** see note 30) | 29,174 | (1,723) |
- Direct marketing and partner commission were reclassified from cost of sales to administrative expenses and tech infrastructure was reclassified from administrative expenses to cost of sales to reflect more appropriately the gross profit and administrative expenses.
** In the prior year there was a correction re deferred tax and corporation tax provision. See note 30 for details.
3. EMPLOYEES AND DIRECTORS
| 30.6.21 | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Wages and salaries | 22,005 | 20,892 |
| Social security costs | 2,228 | 2,377 |
| Other pension costs | 534 | 505 |
| 24,767 | 23,774 |
The average monthly number of employees during the year is as follows:
| 30.6.21 | 30.6.20 | |
|---|---|---|
| Directors | 5 | 4 |
| Sales and marketing product | 160 | 164 |
| Development and system engineers | 105 | 103 |
| Administration | 69 | 67 |
| 339 | 338 |
Included in the total employees cost above, ��5,198,785 (2020: ��5,293,321) was capitalised in relation to internally generated development costs.
4. EXCEPTIONAL COSTS
Continuing exceptional costs incurred in the year relate to the ongoing acquisition costs of Comapi of ��68,095 (2020: ��15,714) and amortisation of acquired intangibles of ��120,000 (2020: ��120,000). Discontinued exceptional costs in the year relate to the amortisation of acquired intangibles of ��nil (2020: ��381,072).
5. NET FINANCE INCOME
| 30.6.21 | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Finance income: | ||
| Deposit account interest | 20 | 40 |
| Finance cost: | ||
| Finance lease interest | (74) | (98) |
| (54) | (58) |
6. OPERATING PROFIT
Costs by nature
Profit from continuing operations has been arrived at after charge and crediting:-
| 30.6.21 Restated* | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Outsourcing and tech infrastructure | 10,356 | 3,899 |
| Total cost of sales | 10,356 | 3,899 |
| 30.6.21 | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Direct marketing | 2,976 | 1,727 |
| Partner commission | 2,198 | 2,566 |
| Staff related costs (inc Directors' emoluments) | 19,208 | 17,929 |
| Auditor's remuneration | 52 | 64 |
| Amortisation of intangibles** | 4,675 | 3,647 |
| Depreciation charge** | 1,410 | 1,475 |
| Legal, professional and consultancy fees | 848 | 479 |
| Computer expenditure | 538 | 578 |
| Bad debts | 897 | 1,248 |
| Foreign exchange losses/(gains) | 543 | (120) |
| Travel and subsistence costs | 87 | 509 |
| Office running | 388 | 176 |
| Gain on disposal of property, plant and equipment | (2) | (3) |
| Staff welfare | 342 | 399 |
| Other costs | 549 | 531 |
| Management charge | (620) | (762) |
| Total administrative expenses | 34,089 | 30,443 |
During the year the Group obtained the following services from the Group's auditor at costs detailed below:
| 30.6.21 | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Fees payable to the Company's auditor for the audit of Parent Company and consolidated financial statements | 28 | 22 |
| Fees payable to the Company's auditor for other services | ||
| - audit of Company subsidiaries | 47 | 47 |
| - review of interim accounts | 5 | 3 |
| 80 | 72 |
Partner commission and direct marketing have been reclassed under administrative expenses and tech infrastructure have been reclassed under cost of sales and comparatives restated (see note 30).
*Both amortisation of intangibles and depreciation charge will not agree to the relevant notes as these numbers only apply to the continuing operations.
7. INCOME TAX EXPENSE
Analysis of the tax charge from continuing operations:
| 30.6.21 *Restated | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Current tax on profits for the year | 1,008 | 575 |
| Changes in estimates related to prior years | (53) | - |
| Deferred tax on origination and reversal of timing differences | 367 | 644 |
| 1,322 | 1,219 |
Analysis of the tax charge from discontinuing operations:
| 30.6.21 | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Current tax on profits for the year | - | - |
| Deferred tax on origination and reversal of timing differences | 101 | - |
| 101 | - |
Factors affecting the tax charge:
| 30.6.21 *Restated | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Profit on ordinary activities from all operations before tax | 12,014 | 11,808 |
| Profit on ordinary activities multiplied by the average rate of corporation tax suffered globally: 19% (2020: 19%) | 2,283 | 2,244 |
| Effects of: | ||
| Expenses not deductible | 281 | 176 |
| Research and development enhanced claim | (2,239) | (2,069) |
| Expenditure permitted on exercising options | (49) | (98) |
| Overseas tax losses | (5) | (20) |
| Depreciation in excess of capital allowances | 737 | 843 |
| Group relief losses brought forward | - | (501) |
| Current tax on profit for the year | 1,008 | 575 |
| Changes in estimates related to prior years | (53) | - |
| Deferred tax on origination and reversal of timing differences | 468 | 644 |
| Total tax charge for the year | 1,423 | 1,219 |
*See note 30
Deferred tax was calculated using the rate 25% (2020: 19%). For further details on deferred tax see note 21. Taxation for each region is calculated at the rates prevailing in the respective jurisdiction. The main rate of UK corporation tax in the period was 19% (2020: 19%). UK deferred balances have been recognised at 25% in the period (2020: 19%).
8. DIVIDENDS
Amounts recognised as distributions to equity holders in the period:
| 30.6.21 | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Paid dividend for year end 30 June 2021 of 0.83p (2020: 0.67p) per share | 2,472 | 1,996 |
| Proposed dividend for the year end 30 June 2021 of 0.86p (2020: 0.83p) per share | 2,583 | 2,480 |
The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
9. EARNINGS PER SHARE
Earnings per share data is based on the consolidated profit using and the weighted average number of shares in issue of the Parent Company. Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. Adjusted earnings per share is based on the consolidated profit deducting the acquisition related exceptional costs and share-based payment. A number of non-IFRS adjusted profit measures are used in this annual report and financial statements. Adjusting items are excluded from our headline performance measures by virtue of their size and nature, in order to reflect management's view of the performance of the Group. Summarised below is a reconciliation between statutory results to adjusted results. The Group believes that alternative performance measures such as adjusted EBITDA are commonly reported by companies in the markets in which it competes and are widely used by investors in comparing performance on a consistent basis without regard to factors such as depreciation and amortisation, which can vary significantly depending upon accounting methods (particularly when acquisitions have occurred), or based on factors which do not reflect the underlying performance of the business. The adjusted profit after tax earnings measure is also used for the purpose of calculating adjusted earnings per share. Reconciliations to earnings figures used in arriving at adjusted earnings per share are as follows:
| 30.6.21 *Restated | 30.6.20 | |
|---|---|---|
| From all operations | ��'000 | ��'000 |
| Profit for the year attributable to the owners of the parent | 10,591 | 10,589 |
| Amortisation of acquisition-related intangible fixed assets (see note 12) | 120 | 501 |
| Other exceptional costs (see note 4) | 68 | 16 |
| Share-based payment (see note 25) | 625 | 682 |
| Adjusted profit for the year attributable to the owners of the parent | 11,404 | 11,788 |
Management does not consider the above adjustments to reflect the underlying business performance. The other exceptional costs relate to ongoing acquisition costs of Comapi.
| 30.6.21 | 30.6.20 | |
|---|---|---|
| ��'000 | ��'000 | |
| Adjusted profit for the year attributable to the owners of the parent for continuing activities. | 12,303 | 11,785 |
| Adjusted loss for the year attributable to the owners of the parent for discontinuing activities. |
From all operations
| Earnings | number of shares | Amount ��'000 | Pence |
|---|---|---|---|
| Basic EPS Profit for the year attributable to the owners of the parent | 298,598,459 | 10,591 | 3.55 |
| Adjusted Basic EPS Adjusted profit for the year attributable to the owners of the parent | 298,598,459 | 11,404 | 3.82 |
| Options and warrants | 4,322,868 | - | - |
| Diluted EPS Profit for the year attributable to the owners of the parent | 302,921,327 | 10,591 | 3.50 |
| Adjusted Diluted EPS Adjusted profit for the year attributable to the owners of the parent | 302,921,327 | 11,404 | 3.76 |
From continuing operations
| Earnings | number of shares | Amount ��'000 | Pence |
|---|---|---|---|
| Basic EPS Profit for the year attributable to the owners of the parent | 298,598,459 | 11,490 | 3.85 |
| Adjusted Basic EPS Adjusted profit for the year attributable to the owners of the parent | 298,598,459 | 12,303 | 4.12 |
| Options and Warrants | 4,322,868 | - | - |
| Diluted EPS Profit for the year attributable to the owners of the parent | 302,921,327 | 11,490 | 3.79 |
| Adjusted Diluted EPS Adjusted profit for the year attributable to the owners of the parent | 302,921,327 | 12,303 | 4.06 |
From discontinued operations
| Earnings | number of shares | Amount ��'000 | Pence |
|---|---|---|---|
| Basic EPS Loss for the year attributable to the owners of the parent | 298,598,459 | (899) | (0.30) |
| Adjusted Basic EPS Adjusted loss for the year attributable to the owners of the parent | 298,598,459 | (899) | (0.30) |
| Options and warrants | 4,322,868 | - | - |
| Diluted EPS Loss for the year attributable to the owners of the parent | 302,921,327 | (899) | (0.30) |
| Adjusted Diluted EPS Adjusted loss for the year attributable to the owners of the parent | 302,921,327 | (899) | (0.30) |
*Restated
30.6.20 Weighted average Per share
From all operations
| Earnings | number of shares | Amount ��'000 | Pence |
|---|---|---|---|
| Basic EPS Profit for the year attributable to the owners of the parent | 298,306,813 | 10,589 | 3.55 |
| Adjusted Basic EPS Adjusted profit for the year attributable to the owners of the parent | 298,306,813 | 11,788 | 3.95 |
| Options and Warrants | 3,883,050 | - | - |
| Diluted EPS Profit for the year attributable to the owners of the parent | 302,189,863 | 10,589 | 3.50 |
| Adjusted Diluted EPS Adjusted profit for the year attributable to the owners of the parent | 302,189,863 | 11,788 | 3.90 |
*Restated
From continuing operations
| Earnings | number of shares | Amount ��'000 | Pence |
|---|---|---|---|
| Basic EPS Profit for the year attributable to the owners of the parent | 298,306,813 | 10,967 | 3.68 |
| Adjusted Basic EPS Adjusted profit for the year attributable to the owners of the parent | 298,306,813 | 11,785 | 3.95 |
| Options and warrants | 3,883,050 | - | - |
| Diluted EPS Profit for the year attributable to the owners of the parent | 302,189,863 | 10,967 | 3.63 |
| Adjusted Diluted EPS Adjusted profit for the year attributable to the owners of the parent | 302,189,863 | 11,785 | 3.90 |
From discontinued operations
| Earnings | number of shares | Amount ��'000 | Pence |
|---|---|---|---|
| Basic EPS Loss for the year attributable to the owners of the parent | 298,306,813 | (378) | (0.13) |
| Adjusted Basic EPS Adjusted Loss for the year attributable to the owners of the parent | 298,306,813 | 3 | (0.00) |
| Options and Warrants | 3,883,050 | - | - |
| Diluted EPS Loss for the year attributable to the owners of the parent | 302,189,863 | (378) | (0.13) |
| Adjusted Diluted EPS Adjusted loss for the year attributable to the owners of the parent | 302,420,648 | 3 | (0.00) |
30.6.21 30.6.20 Shares Shares
| 30.6.21 | 30.6.20 | |
|---|---|---|
| Basic EPS | 298,598,459 | 298,306,813 |
| Diluted EPS | 302,921,327 | 302,189,863 |
Weighted average number of shares *See note 30
10. CONTINUING AND DISCONTINUED OPERATIONS
The analysis between continuing and discontinued operation is as follows:
Year ended 30 June 2021
| Continuing operations ��'000 | Discontinuing operations ��'000 | TOTAL ��'000 | |
|---|---|---|---|
| Revenue | 58,124 | 2,426 | 60,550 |
| Cost of sales | (10,356) | (1,211) | (11,567) |
| Gross profit | 47,768 | 1,215 | 48,983 |
| Administrative expense | (34,089) | (2,012) | (36,101) |
| Share based payments | (625) | - | (625) |
| Exceptional costs | (188) | - | (188) |
| OPERATING PROFIT | 12,866 | (797) | 12,069 |
| Finance income | 20 | - | 20 |
| Finance costs | (74) | (1) | (75) |
| PROFIT BEFORE INCOME TAX | 12,812 | (798) | 12,014 |
| Income tax expense | (1,322) | (101) | (1,423) |
| PROFIT FOR THE YEAR | 11,490 | (899) | 10,591 |
Year ended 30 June 2020
| Continuing operations ��'000 | Discontinuing operations ��'000 | TOTAL ��'000 | |
|---|---|---|---|
| Revenue | 47,404 | 7,508 | 54,912 |
| Cost of sales (restated see note 30) | (3,899) | (5,916) | (9,815) |
| Gross profit | 43,505 | 1,592 | 45,097 |
| Administrative expense (restated see note 30) | (30,443) | (1,587) | (32,030) |
| Share based payments | (682) | - | (682) |
| Exceptional costs | (136) | (381) | (517) |
| OPERATING PROFIT | 12,244 | (376) | 11,868 |
| Finance income | 40 | - | 40 |
| Finance costs | (98) | (2) | (100) |
| PROFIT BEFORE INCOME TAX | 12,186 | (378) | 11,808 |
| Income tax expense | (1,219) | - | (1,219) |
| PROFIT FOR THE YEAR | 10,967 | (378) | 10,589 |
11. GOODWILL
Group
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| COST | ||
| At 1 July | 13,192 | 13,192 |
| At 30 June | 13,192 | 13,192 |
| IMPAIRMENT | ||
| At 1 July | 3,512 | 3,512 |
| At 30 June | 3,512 | 3,512 |
| NET BOOK VALUE | 9,680 | 9,680 |
Goodwill is allocated to the Group's two cash generating units (CGUs) identified, those being Dotdigital and Comapi. Goodwill arising on business combinations is not amortised but is reviewed for impairment on an annual basis, or more frequently if there are indications that goodwill may be impaired. Goodwill acquired in a business combination is allocated, at acquisition, to CGUs that are expected to benefit from that business combination. The carrying amount of goodwill relates to the Group's two trading activities and business segments. This has been tested for impairment during the current period by comparison with the recoverable amounts of the CGU. Recoverable amounts for CGUs are based on the higher of value in use and fair value less costs to sell. The recoverable amounts of the CGU have been determined from value in use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rate for the continuing operations of the Group. These long-term growth rates are management's estimates. The discount rates used are pre-tax and reflect specific risks relating to the continuing operations of the Group. The key assumptions for the value in use calculations are those regarding discount rates, growth rates, and expected changes in margins.
Discount rate
Management estimates discount rates using pre-tax rates that reflect the current market assessment of the time value of money and the risks specific to the CGUs. The pre-tax discount rate used to calculate the value in use is 6.2% (2020: 6.2%).
Growth rates
The growth rate is stated as the compound annual growth rates in the initial five years for the continuing operations of the Group which are then used for impairment testing. These are performed using the projected cash flows based on budgets approved by management over a five-year period. Cash flow projections from the sixth year onwards are based on an estimated constant growth rate. The growth rate used to calculate the value in use is 14% (2020: 12%).
Gross profit margin
Changes in income and expenditure are based on experience and expectations of the future changes in the market. The impairment review is based on these estimated gross profit margins which were included with the budgets approved by management over a five-year period. From the sixth year onwards, an assumed constant margin is used. The gross profit margin used to calculate the value in use in 75% (2020: 86%). The valuations indicate sufficient headroom such that a reasonably possible change in key assumptions would not result in impairment of goodwill.
Sensitivity analysis
The principal variables used, being both the discount rate and growth rates, these would need to change before an impairment is required, this being 225% (2020: 155%) discount rate and growth rate of (21%) (2020: -17%).
12. INTANGIBLE ASSETS
Group
Customer relationships
| Technology ��'000 | |
|---|---|
| COST | |
| At 1 July 2020 | 1,205 |
| Additions | - |
| At 30 June 2021 | 1,205 |
| AMORTISATION | |
| At 1 July 2020 | 1,205 |
| Amortisation for the year | - |
| At 30 June 2021 | 1,205 |
| NET BOOK VALUE | - |
Technology
| Customer relationships ��'000 | Technology ��'000 | |
|---|---|---|
| COST | ||
| At 1 July 2020 | 1,205 | 1,200 |
| Additions | - | - |
| At 30 June 2021 | 1,205 | 1,200 |
| AMORTISATION | ||
| At 1 July 2020 | 1,205 | 310 |
| Amortisation for the year | - | 120 |
| At 30 June 2021 | 1,205 | 430 |
| NET BOOK VALUE | - | 770 |
Computer software costs
| Internally generated development ��'000 | Domain names ��'000 | Totals ��'000 | |
|---|---|---|---|
| COST | |||
| At 1 July 2020 | 954 | 27,255 | 42 |
| Additions | 69 | 6,797 | 4 |
| At 30 June 2021 | 1,023 | 34,052 | 46 |
| AMORTISATION | |||
| At 1 July 2020 | 793 | 14,255 | 34 |
| Amortisation for the year | 81 | 4,592 | 2 |
| At 30 June 2021 | 874 | 18,847 | 36 |
| NET BOOK VALUE | 149 | 15,205 | 10 |
Customer relationships (Previous Year)
| Technology ��'000 | |
|---|---|
| COST | |
| At 1 July 2019 | 1,205 |
| Additions | - |
| At 30 June 2020 | 1,205 |
| AMORTISATION | |
| At 1 July 2019 | 824 |
| Amortisation for the year | 381 |
| At 30 June 2020 | 1,205 |
| NET BOOK VALUE | - |
Technology (Previous Year)
| Customer relationships ��'000 | Technology ��'000 | |
|---|---|---|
| COST | ||
| At 1 July 2019 | 1,205 | 1,200 |
| Additions | - | - |
| At 30 June 2020 | 1,205 | 1,200 |
| AMORTISATION | ||
| At 1 July 2019 | 190 | 190 |
| Amortisation for the year | 120 | 120 |
| At 30 June 2020 | 310 | 310 |
| NET BOOK VALUE | 890 | 890 |
Computer software costs (Previous Year)
| Internally generated development ��'000 | Domain names ��'000 | Totals ��'000 | |
|---|---|---|---|
| COST | |||
| At 1 July 2019 | 911 | 20,794 | 41 |
| Additions | 43 | 6,461 | 1 |
| At 30 June 2020 | 954 | 27,255 | 42 |
| AMORTISATION | |||
| At 1 July 2019 | 697 | 10,706 | 32 |
| Amortisation for the year | 96 | 3,549 | 2 |
| At 30 June 2020 | 793 | 14,255 | 34 |
| NET BOOK VALUE | 161 | 13,000 | 8 |
Development cost additions represents resources the Group has invested in the development of new, innovative and ground-breaking technology products for marketing professionals. This platform allows them to create, send and automate marketing campaigns. Following development of the products the Group intends to licence the use of the platform. Technology represents the cost that would be incurred to build the entire Comapi platform had the acquisition not occurred. Customer relationships represent the value of high-value customer contracts within Comapi.
13.# PROPERTY, PLANT AND EQUIPMENT
| Group | Right of Use assets | Short leasehold | Fixtures & fittings | Computer equipment | Totals |
|---|---|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 | ��'000 | ��'000 |
| COST | |||||
| At 1 July 2020 | 5,458 | 730 | 770 | 2,473 | 9,431 |
| Additions | 115 | - | - | 169 | 284 |
| Disposals | (136) | - | (4) | (14) | (154) |
| Exchange differences | (53) | (5) | (12) | (14) | (84) |
| At 30 June 2021 | 5,384 | 725 | 754 | 2,614 | 9,477 |
| DEPRECIATION | |||||
| At 1 July 2020 | 1,058 | 465 | 632 | 2,014 | 4,169 |
| Depreciation for the year | 1,091 | 65 | 63 | 244 | 1,463 |
| Disposals | (66) | - | (2) | (10) | (78) |
| Exchange differences | (22) | (4) | (13) | (10) | (49) |
| At 30 June 2021 | 2,061 | 526 | 680 | 2,238 | 5,505 |
| NET BOOK VALUE | |||||
| At 30 June 2021 | 3,323 | 199 | 74 | 376 | 3,972 |
| Group | Right of Use assets | Short leasehold | Fixtures & fittings | Computer equipment | Totals |
|---|---|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 | ��'000 | ��'000 |
| COST | |||||
| At 1 July 2019 | - | 646 | 779 | 2,294 | 3,719 |
| Additions | 63 | 78 | 22 | 177 | 340 |
| Disposals | - | - | (30) | - | (30) |
| Adjustment on transition of IFRS 16 | 5,335 | - | - | - | 5,335 |
| Exchange differences | 60 | 6 | (1) | 2 | 67 |
| At 30 June 2020 | 5,458 | 730 | 770 | 2,473 | 9,431 |
| DEPRECIATION | |||||
| At 1 July 2019 | - | 402 | 554 | 1,726 | 2,682 |
| Depreciation for the year | 1,122 | 63 | 77 | 286 | 1,548 |
| Disposals | (61) | - | - | - | (61) |
| Exchange differences | (3) | - | 1 | 2 | - |
| At 30 June 2020 | 1,058 | 465 | 632 | 2,014 | 4,169 |
| NET BOOK VALUE | |||||
| At 30 June 2020 | 4,400 | 265 | 138 | 459 | 5,262 |
Included in the net carrying amount of property, plant and equipment are the right-of-use assets as follows:
| Motor vehicles | Properties | Totals | |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 |
| COST | |||
| As at 1 July 2020 | 5,376 | 82 | 5,458 |
| Termination of leases | (136) | - | (136) |
| Additions | 42 | 73 | 115 |
| Foreign currency translation | (53) | - | (53) |
| At 30 June 2021 | 5,229 | 155 | 5,384 |
| DEPRECIATION | |||
| As at 1 July 2020 | 1,015 | 43 | 1,058 |
| Depreciation for the year | 1,010 | 81 | 1,091 |
| Termination of leases | (65) | - | (65) |
| Foreign currency translation | (18) | (5) | (23) |
| At 30 June 2021 | 1,942 | 119 | 2,061 |
| NET BOOK VALUE | |||
| At 30 June 2021 | 3,287 | 36 | 3,323 |
| Motor vehicles | Properties | Totals | |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 |
| COST | |||
| Transition on adoption of IFRS 16 | 5,678 | 82 | 5,760 |
| Re-measurement of existing lease liabilities | (156) | - | (156) |
| Termination of leases | (269) | - | (269) |
| Additions | 63 | - | 63 |
| Foreign currency translation | 60 | - | 60 |
| At 30 June 2020 | 5,376 | 82 | 5,458 |
| DEPRECIATION | |||
| Depreciation for the year | 1,079 | 43 | 1,122 |
| Termination of leases | (61) | - | (61) |
| Foreign currency translation | (3) | - | (3) |
| At 30 June 2020 | 1,015 | 43 | 1,058 |
| NET BOOK VALUE | |||
| At 30 June 2020 | 4,361 | 39 | 4,400 |
14. TRADE AND OTHER RECEIVABLES
| Group | 30.6.21 | 30.6.20 |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| Current: | ||
| Trade receivables | 10,895 | 10,364 |
| Less: Provision for impairment of trade receivables | (1,785) | (1,589) |
| Trade receivables - net | 9,110 | 8,775 |
| Other receivables | 60 | 194 |
| Amounts owed by Group undertakings | - | - |
| VAT | - | - |
| Tax receivable | - | - |
| Prepayments and contract assets | 4,180 | 4,018 |
| 13,350 | 12,987 |
Further details on the above can be found in note 20. Included within Group prepayments is an amount of ��299,016 (2020: ��404,150) in relation to deferred commission which is considered to be long term. The Group has applied IFRS 9 simplified approach to measuring expected credit losses, the balances have been assessed based on each entity's ability to repay amounts owed and no expected credit loss has been recognised.
15. CASH AND CASH EQUIVALENTS
| Group | 30.6.21 | 30.6.20 |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| Bank accounts | 31,951 | 25,383 |
| 31,951 | 25,383 |
Further details on the above can be found in note 20.
16. CALLED UP SHARE CAPITAL
Allotted, issued, fully paid
| Nominal value | 30.6.21 | 30.6.20 | |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | |
| 298,778,630 (2020: 298,547,645) ��0.005 | 1,494 | 1,493 | 1,494 |
During the reporting period the Company undertook the following transactions involving the issuing of share capital:
On 12 March 2021 an employee exercised their share options, increasing the issued share capital by 20,000 shares at a premium price of 68.5p.
On 12 March 2021 an employee exercised their share options, increasing the issued share capital by 65,000 shares at a premium price of 68.5p.
On 28 April 2021 an employee exercised their share options, increasing the issued share capital by 145,985 shares at a premium price of 68.5p.
17. RESERVES
| Group | Retained earnings | Share premium | Reverse acquisition |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 |
| As at 1 July 2020 | 45,655 | 6,967 | (4,695) |
| Issue of share capital | - | 157 | - |
| Dividends | (2,472) | - | - |
| Profit for the year | 10,591 | - | - |
| Transfer of reserves | 307 | - | - |
| Deferred tax on share options | - | - | - |
| Other comprehensive income: | |||
| currency translation | - | - | - |
| Share-based payment | - | - | - |
| Balance as at 30 June 2021 | 54,081 | 7,124 | (4,695) |
| Retranslation reserves | Other reserves | Totals |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| As at 1 July 2020 | 50 | 1,600 |
| Issue of share capital | - | - |
| Dividends | - | - |
| Profit for the year | - | - |
| Transfer of reserves | - | (307) |
| Deferred tax on share options | - | 1,148 |
| Other comprehensive income: | ||
| currency translation | (87) | - |
| Share-based payment | - | 625 |
| Balance as at 30 June 2021 | (37) | 3,066 |
| Group | Retained earnings | Share premium | Reverse acquisition |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 |
| Restated balance as at 1 July 2019 (see note 30) | 36,971 | 6,791 | (4,695) |
| Issue of share capital | - | 176 | - |
| Dividends | (1,996) | - | - |
| Profit for the year | 10,589 | - | - |
| Transfer in reserves | 30 | - | - |
| Deferred tax on share options | - | - | - |
| Adjustments in relation to IFRS 16 | 61 | - | - |
| Currency translation | - | - | - |
| Share-based payment | - | - | - |
| Restated balance as at 30 June 2020 (see note 30) | 45,655 | 6,967 | (4,695) |
| Retranslation reserves | Other reserves | Totals |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| Restated balance at 1 July 2019 (see note 30) | 16 | 910 |
| Issue of share capital | - | - |
| Dividends | - | - |
| Profit for the year | - | - |
| Transfer in reserves | - | (30) |
| Deferred tax on share options | - | 38 |
| Adjustments in relation to IFRS 16 | - | - |
| Currency translation | 34 | - |
| Share-based payment | - | 682 |
| Restated balance as at 30 June 2020 (see note 30) | 50 | 1,600 |
18. TRADE AND OTHER PAYABLES
| Group | 30.6.21 | 30.6.20 |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| Current: | ||
| Trade payables | 769 | 1,732 |
| Amounts owed to Group undertakings | - | - |
| Social security and other taxes | 29 | 50 |
| Other payables | 84 | 179 |
| VAT | 18 | 1,801 |
| Accruals and contract liabilities | 8,434 | 6,034 |
| 9,334 | 9,796 |
Further details on liquidity and interest rate risk can be found in note 20. Amounts owed to group undertakings are non-interest bearing and are repayable on demand.
19. LEASE LIABILITIES
| Group | Properties | Motor Vehicles | Totals |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 |
| At 1 July 2020 | 4,427 | 40 | 4,467 |
| Termination of leases | (67) | - | (67) |
| Additions | 42 | 73 | 115 |
| Principal repayments | (1,132) | (50) | (1,182) |
| Interest | 110 | 1 | 111 |
| Foreign currency retranslation | (21) | - | (21) |
| At 30 June 2021 | 3,359 | 64 | 3,423 |
| Current | 906 | 28 | 934 |
| Non-current | 2,453 | 36 | 2,489 |
| At 30 June 2021 | 3,359 | 64 | 3,423 |
| Group | Properties | Motor Vehicles | Totals |
|---|---|---|---|
| ��'000 | ��'000 | ��'000 | ��'000 |
| At 1 July 2019 | - | - | - |
| Transition on adoption of IFRS 16 | 5,678 | 82 | 5,760 |
| Re-measurement of existing lease liabilities | (162) | - | (162) |
| Termination of leases | (264) | - | (264) |
| Additions | 63 | - | 63 |
| Principal repayments | (1,084) | (44) | (1,128) |
| Interest | 136 | 2 | 138 |
| Foreign currency retranslation | 60 | - | 60 |
| At 30 June 2020 | 4,427 | 40 | 4,467 |
| Current | 1,034 | 34 | 1,068 |
| Non-current | 3,393 | 6 | 3,399 |
| At 30 June 2020 | 4,427 | 40 | 4,467 |
The properties are office leases located in various locations where the term is ranging from one to eight years. The motor vehicles are company cars offered to senior staff where the term is always three years.
20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's activities expose it to a number of financial risks that include credit risk, liquidity risk, currency risk and interest rate risk. These risks and the Group's policies for managing them have been applied consistently during the year and are set out below. The Group holds no financial or other non-financial instruments other than those utilised in the working operations of the Group and that are listed in this note. It is the Group's policy not to trade in derivative contracts.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument rate risk arises, are as follows:
- Trade receivables
- Cash and cash equivalents
- Trade and other payables
- Lease Liabilities
Financial instruments by category
The following table sets out the financial instruments as at the reporting date:
| Group | 30.6.21 | 30.6.20 |
|---|---|---|
| ��'000 | ��'000 | ��'000 |
| Financial assets | ||
| Trade and other receivables | 9,167 | 8,969 |
| Bank balances | 31,951 | 25,383 |
| 41,118 | 34,352 | |
| Financial liabilities | ||
| Trade payables | 769 | 1,732 |
| Amounts owed to group undertakings | - | - |
| Accrued liabilities and other payables | 8,221 | 7,268 |
| 8,990 | 9,000 |
The fair value of the financial assets and financial liabilities is equal to their carrying values. All financial assets are categorised as loans and receivables and all financial liabilities are categorised as financial liabilities at amortised costs.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk management objectives and policies and whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's Risk Committee. The Board receives quarterly reports from the Risk Committee, through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company's competitiveness and flexibility. Further details regarding these policies are set out below:
Interest rate risk
The Group's interest rate risk arises from interest-bearing assets and liabilities. The Group has in place a policy of maximising finance income by ensuring that cash balances earn a market rate of interest offsetting where possible cash balances, and by forecasting and financing its working capital requirements. As at the reporting date the Group was not exposed to any movement in interest rates as it has no external borrowings and therefore is not exposed to interest rate risk. No sensitivity analysis has been prepared.The Group's working capital requirements are managed through regular monitoring of the overall cash position and regularly updated cash flow forecasts to ensure there are sufficient funds available for its operations. Liquidity risk The Group's working capital requirements are managed through regular monitoring of the overall position and regularly updated cash flow forecasts to ensure there are funds available for its operations. Management forecasts indicate no new borrowing facilities will be required in the upcoming financial period. Trade and other payables of ��10,221,000 (2020: ��9,013,000) are expected to mature in less than a year. Credit risk Credit risk arises principally from the Group's trade receivables, as there are no trade receivables within the Company, which comprise amounts due from customers. Prior to accepting new customers, a credit check is obtained. As at 30 June 2021 there were no significant debts past their due period which had not been provided for. The maturity of the Group's trade receivables is as follows:
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| 0-30 days | 5,734 | 6,770 |
| 30-60 days | 2,701 | 911 |
| More than 60 days | 2,550 | 2,683 |
| Total | 10,985 | 10,364 |
The maturity of the Group's provision for impairment is as follows:
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| 0-30 days | 140 | 1 |
| 30-60 days | 154 | 13 |
| More than 60 days | 1,491 | 1,575 |
| Total | 1,785 | 1,589 |
The movement in the provision for the impairment is as follows:
| 30.06.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| As at 1 July | 1,589 | 999 |
| Provision for impairment | 262 | 1,048 |
| Receivable written off in the year | (66) | (335) |
| Unused amount reversed | - | (123) |
| As at 30 June | 1,785 | 1,589 |
The Group minimises its credit risk by profiling all new customers and monitoring existing customers of the Group for changes in their initial profile. The level of trade receivables older than the average collection period consisted of a value of ��2,484,862 (2020: ��2,960,513) of which ��1,502,918 (2020: ��1,574,891) was provided for. The Group felt that the remainder would be collected post year-end as they were with long-standing relationships, and the risk of default is considered to be low and write-offs due to bad debts are extremely low. The Group has no significant concentration of credit risk, with the exposure spread over a large number of customers. The credit risk on liquid funds is low as the counterparts are banks with high credit ratings assigned by international credit rating bodies. The majority of the Company's cash holdings are held at NatWest Bank, which has a BBB credit rating. The carrying value of both financial assets and liabilities approximates to fair value.
Capital policy
The Group's objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide optimal returns for shareholders and to maintain an efficient capital structure to reduce the cost of capital. In doing so the Group's strategy is to maintain a capital structure commensurate with a strong credit rating and to retain appropriate levels of liquidity headroom to ensure financial stability and flexibility. To achieve this, the Group monitors key credit metrics, risk and fixed charge cover to maintain this position. In addition the Group ensures a combination of appropriate short-term and long-term liquidity headroom. During the year the Group had a short-term loan balance of ��nil (2020: ��nil) and amounts payable over one year are nil (2020: ��nil). The Group had a strong cash reserve to utilise for any short-term capital requirements that were needed. The Group has continued to look for further long-term investments or acquisitions and therefore, to maintain or re-align the capital structure, the Group may adjust when dividends are paid to shareholders, return capital to shareholders, issue new shares or borrow from lenders.
Maturities of financial liabilities
The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities (the Group does not hold any derivative financial instruments in the current or prior financial year). The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of the discounting is not significant.
Contractual maturities at 30 June 2021
| <6 months ��'000 | 6 to 12 months ��'000 | 1 to 2 years ��'000 | 2 to 5 years ��'000 | Total contractual cash flows ��'000 | carrying amounts ��'000 | |
|---|---|---|---|---|---|---|
| Trade and other payables | 9,334 | - | - | - | 9,334 | 9,334 |
| Lease liabilities | 480 | 454 | 759 | 1,730 | 3,423 | 3,423 |
| Total non-derivatives | 9,814 | 454 | 759 | 1,730 | 12,757 | 12,757 |
Contractual maturities at 30 June 2020
| <6 months ��'000 | 6 to 12 months ��'000 | 1 to 2 years ��'000 | 2 to 5 years ��'000 | Total contractual cash flows ��'000 | carrying amounts ��'000 | |
|---|---|---|---|---|---|---|
| Trade and other payables | 9,796 | - | - | - | 9,796 | 9,796 |
| Lease liabilities | 532 | 536 | 960 | 2,439 | 4,467 | 4,467 |
| Total non-derivatives | 10,328 | 536 | 960 | 2,439 | 14,263 | 14,263 |
21. DEFERRED TAX
| 30.6.21 Restated* ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| As at 1 July | 1,983 | 1,377 |
| Current year provision | (776) | 606 |
| Total | 1,207 | 1,983 |
The deferred tax liability above comprises the following temporary differences:
| 30.6.21 Restated * ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| Acquired intangibles | 146 | 169 |
| Capital allowances in excess of depreciation | 38 | 53 |
| R&D relief in excess of amortisation | 2,963 | 2,325 |
| Share option relief | (1,805) | (495) |
| Losses | (135) | (69) |
| Total | 1,207 | 1,983 |
*Refer to note 30. Deferred tax provision relates to taxes to be levied by the same authority on the same entity expected to be settled at the same time. As such deferred tax assets and liabilities have been offset.
22. CAPITAL COMMITMENTS
The Company and Group have no capital commitments as at the year end.
23. RELATED PARTY DISCLOSURES
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Group
The following transactions were carried out with related parties and were made on terms equivalent to those that prevail in arm's length transactions.
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| Sale of services | ||
| Ipswich Town Football Club Entity under common directorship Email marketing services | 4 | - |
| Epwin Group Plc Entity under common directorship Email marketing services | 6 | 4 |
| Total | 10 | 4 |
Year end balances arising from sale of services
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| Ipswich Town Football Club Entity under common directorship Email marketing services | 1 | - |
| Epwin Group Plc Entity under common directorship Email marketing services | 1 | 1 |
| Total | 2 | 1 |
Directors
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| Aggregate emoluments | 1,136 | 897 |
| Company contributions to money purchase pension scheme | 26 | 25 |
| Share-based payments from the LTIP options granted | 347 | 438 |
| Total | 1,509 | 1,360 |
Directors' pay summary does include Non-Executive Directors. Information in relation to the highest paid Director is as follows:
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| Salaries | 574 | 440 |
| Other benefits | 14 | 17 |
| Pension costs | 16 | 15 |
| Share-based payments on the LTIP options granted | 198 | 289 |
| Total | 802 | 761 |
The receivables and payables are unrestricted in nature and bear no interest. No provisions are held against receivables from related parties.
Loans to/from related parties
| 30.6.21 ��'000 | 30.6.20 ��'000 | |
|---|---|---|
| Dotdigital EMEA Limited Subsidiary | ||
| As at 1 July | (3,545) | (4,580) |
| Loans advanced | 5,075 | 3,060 |
| Loans repaid | (2,571) | (2,025) |
| Net Movement | (1,041) | (3,545) |
IAS 24 Related Party Disclosure allows disclosure exemption of transactions between wholly-owned subsidiaries that are eliminated on consolidation.
24. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party of the Group. Dotdigital Group Plc acts as the Parent Company to Dotdigital EMEA Limited, Dotdigital Inc, Dotdigital APAC Pty Limited, Dotdigital B.V., Dotmailer Developments Limited, Dotmailer SA Pty, Dotmailer LLC, Dotdigital SG Pte. Limited, Dynmark International Ltd, Dotdigital Canada Inc and Dynmark S.p. z.o.o.
25. SHARE-BASED PAYMENT TRANSACTIONS
The measurement requirements of IFRS 2 have been implemented in respect of share options that were granted after 7 November 2002. The expense recognised for share-based payment made during the year is ��625,000 (2020: ��682,000). Vesting conditions of the options dictate that employees must remain in the employment of the Group for the whole period to qualify.
Movement in issued share options during the year
The table below illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options during the period. The options outstanding at 30 June 2021 had a WAEP of 26.05p (2020: 51.09p) and a weighted average contracted life of 5.14 years (2020: 3.01 years) and their exercise prices ranged from 0.5p to 147.5p. All share options are settled in form of equity issued.
| 30.06.21 | 30.6.20 | |||
|---|---|---|---|---|
| No of options | WAEP | No of options | WAEP | |
| Outstanding at the beginning of the period | 3,910,984 | 51.09p | 4,428,064 | 49.16p |
| Granted during the year | 1,093,728 | 107.54p | - | 0p |
| Forfeited/cancelled during the period | (480,992) | 13.03p | - | 0p |
| Exchanged for shares | (230,985) | 68.50p | (517,080) | 34.57p |
| Outstanding at the end of the period | 4,292,735 | 27.51p | 3,910,984 | 51.09p |
| Exercisable at the end of the period | - | - | 230,985 | 68.50p |
The weighted average share price at the date of the exercise for share options exercised during the period was 178.57p (2020: 92p). The Black Scholes model was used in measuring the fair use of the options granted.
| 22 December 2020 | 14 December 2020 | 24 October 2018 | 19 December 2017 | |
|---|---|---|---|---|
| Number of options granted | 306,728 | 787,000 | 2,305,000 | 1,375,000 |
| Share price at grant date | 152.0p | 147.50p | 77.5p | 85.95p |
| Exercise price | 0.50p | 147.50p | 0.50p | 0.50p |
| Option life in years | 5 years | 10 years | 5 years | 5 years |
| Risk-free rate | 0.95% | 1.23% | 1.23% | 1.33% |
| Expected volatility | 30% | 32% | 30% | 30% |
| Expected dividend yield | 1% | 1% | 1% | 1% |
| Fair value of options | 103.72p | 26.99p | 52.70p | 65.03p |
Expected volatility was determined by calculating the historical volatility of the Group's share price from the date it listed to the grant date of the share option.The expected life used in the model is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share options granted on 24 October 2018 and 22 December 2020 were following the approval of the LTIP scheme at the AGM on 19 December 2017 and the end-to-end awards that were granted to key personnel.
26. GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED FROM OPERATIONS
| Group | 30.6.21 ��'000 | 30.6.20 ��'000 |
|---|---|---|
| Current: Profit before tax from all operations | 12,014 | 11,808 |
| Amortisation | 4,795 | 4,148 |
| Depreciation | 1,267 | 1,548 |
| Exceptional costs | 68 | 16 |
| Finance lease non-cash movement | (48) | 4 |
| Adjustments in relation to IFRS 16 | - | 61 |
| Gain on disposal of fixed assets | (2) | (3) |
| Loss on disposal of investments | - | - |
| Share-based payments | 625 | 682 |
| Finance expense | 75 | 100 |
| 18,794 | 18,364 | |
| (Increase)/decrease in trade receivables | (363) | (1,157) |
| Increase in trade payables | (462) | (1,300) |
| Cash generated from operations | 17,969 | 15,907 |
27. GROUP CASH AND CASH EQUIVALENTS
The amounts disclosed in the statement of cash flow in respect of cash and cash equivalents are in respect of these statements of financial position amounts:
| Group | ��'000 |
|---|---|
| As at 1 July 2019 | 19,320 |
| As at 30 June 2020 | 25,383 |
| As at 30 June 2021 | 31,951 |
28. PROJECT DEVELOPMENT
During the year the Group incurred ��6,797,279 (2020: ��6,461,313) in development investments. All resources utilised in development have been capitalised as outlined in the accounting policy governing this area.
29. EVENTS AFTER THE END OF THE REPORTING PERIOD
There are no events after the end of the reporting period which impact the Group's and Company's financial statements.
30. PRIOR YEAR RESTATEMENT NOTE
During the year, the Group made the decision to modify the classification of direct marketing and partner commission from cost of sales to administrative expenses and tech infrastructure from under administrative expenses to cost of sales, to reflect more appropriately gross profit and gross profit margin plus also administrative expenses under continuing operations. Comparative amounts in the Consolidated Income Statement have been reclassified for consistency.
As a result, ��4,293,125 was reclassified from cost of sales to administrative expenses and ��1,826,195 were reclassified from administrative expenses to cost of sales. There has been no impact on the prior year's profit for the year however gross profit has increased from ��41,038,000 to ��43,505,000 and administrative expenses have increased from ��27,976,000 to ��30,443,000.
During the year, the Group discovered that the share-based payment arrangement had been erroneously recognised in Dotdigital Group PLC instead of being recognised in the subsidiaries in which the employees are employed. Under IFRS 2 Share based payments, when a parent grants rights to its equity instruments to employees of its subsidiaries this arrangement should be accounted for as equity-settled in the consolidated financial statements but results in an investment being created in the parent's own statement of financial position. Therefore, the subsidiaries should in their own separate financial statements, measure the services received from its employees in accordance with the requirements of IFRS 2 applicable to equity-settled share-based payment transactions. Thereby resulting in a corresponding increase recognised in equity as a capital contribution from the parent. There has been no impact on the prior year's Group profit for the year, however company only investments increased from ��15,142,000 to ��17,516,000 and retained earnings increased from ��3,550,000 to ��5,924,000.
At the year end, the Group discovered on the calculation of deferred tax on the share options and the internally generated development costs that this had been misallocated and miscalculated respectively. On the matter of the misallocation of the deferred tax on the share option under IFRS 2 Share based payment, where the final deferred tax calculation exceeds the cumulative amount recognised as a share-based payment expense in the Income Statement, the maximum amount of deferred tax income that can be recognised in the Income Statement can only equal the total share-based payment expense. Any excess deferred tax income is recognised directly in reserves. As for the miscalculation of deferred tax on the internally generated development costs this is with respect to the identification and calculation of the net book value for internally generated development costs qualifying for research and development, thereby impacting the deferred tax liability. Both adjustments have impacted the prior year's profit for the year from continuing operations where this has increased from ��10,636,000 to ��10,967,000 and total comprehensive income attributable to owners of the parent has increased from ��10,292,000 to ��10,623,000. Net assets as per the consolidated statement of financial position have also increased from ��50,701,000 to ��51,070,000.
Consolidated Income Statement for the year ended 30 June 2020
| As previously reported ��'000 | Adjustments ��'000 | As restated ��'000 | |
|---|---|---|---|
| CONTINUING OPERATIONS | |||
| Revenue from contracts with customers | 47,404 | - | 47,404 |
| Cost of sales | (6,366) | 2,467 | (3,899) |
| Gross profit | 41,038 | 2,467 | 43,505 |
| Administrative expenses | (27,976) | (2,467) | (30,443) |
| OPERATING PROFIT FROM CONTINUING OPERATIONS PRE SHARE-BASED PAYMENTS AND EXCEPTIONAL COSTS | 13,062 | - | 13,062 |
| Share-based payments | (682) | - | (682) |
| Exceptional costs | (136) | - | (136) |
| OPERATING PROFIT FROM CONTINUING OPERATIONS | 12,244 | - | 12,244 |
| Finance costs | (98) | - | (98) |
| Finance income | 40 | - | 40 |
| PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS | 12,186 | - | 12,186 |
| Income tax expense | (1,550) | 331 | (1,219) |
| Profit for the year from continuing operations | 10,636 | 331 | 10,967 |
| Loss for the year from discontinuing operations | (378) | - | (378) |
| Profit for the year attributable to the owners of the parent | 10,258 | 331 | 10,589 |
Consolidated Statement of Comprehensive Income for the year ended 30 June 2020
| As previously reported ��'000 | Adjustments ��'000 | As restated ��'000 | |
|---|---|---|---|
| PROFIT FOR THE YEAR | 10,258 | 331 | 10,589 |
| OTHER COMPREHENSIVE INCOME | |||
| Items that may be subsequently reclassified to profit or loss: | |||
| Exchange differences on translating foreign operations | 34 | - | 34 |
| Total comprehensive income attributable to: | |||
| Owners of the parent | 10,292 | 331 | 10,623 |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR | |||
| Comprehensive income from continuing operations | 10,670 | 331 | 11,001 |
| Comprehensive loss from discontinued operations | (378) | - | (378) |
Operating Profit Costs by nature
| As previously reported ��'000 | Adjustments ��'000 | As restated ��'000 | |
|---|---|---|---|
| Profit from continuing operations has been arrived after charging:- | |||
| Direct marketing | 1,727 | (1,727) | - |
| Outsourcing and other costs | 4,639 | (4,639) | - |
| Outsourcing and tech infrastructure | - | 3,899 | 3,899 |
| Total cost of sales | 6,366 | (2,467) | 3,899 |
| As previously reported ��'000 | Adjustments ��'000 | As restated ��'000 | |
|---|---|---|---|
| Direct marketing | - | 1,727 | 1,727 |
| Partner commission | - | 2,566 | 2,566 |
| Staff-related costs (inc Directors' emoluments) | 17,929 | - | 17,929 |
| Auditor's remuneration | 64 | - | 64 |
| Amortisation of intangibles | 3,647 | - | 3,647 |
| Depreciation charge | 1,475 | - | 1,475 |
| Legal, professional and consultancy fees | 479 | - | 479 |
| Computer expenditure | 2,404 | (1,826) | 578 |
| Bad debts | 1,248 | - | 1,248 |
| Foreign exchange losses/(gains) | (120) | - | (120) |
| Travel and subsistence costs | 509 | - | 509 |
| Office running | 176 | - | 176 |
| Gain on disposal of tangible asset | (3) | - | (3) |
| Staff welfare | 399 | - | 399 |
| Other costs | 531 | - | 531 |
| Management charge | (762) | - | (762) |
| Total administration costs | 27,976 | 2,467 | 30,443 |
Consolidated Statement of Financial Position 30 June 2019
| As previously reported ��'000 | Adjustments ��'000 | As restated ��'000 | |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Goodwill | 9,680 | - | 9,680 |
| Intangible assets | 11,702 | - | 11,702 |
| Property, plant and equipment | 1,037 | - | 1,037 |
| 22,419 | - | 22,419 | |
| CURRENT ASSETS | |||
| Trade and other receivables | 12,222 | - | 12,222 |
| Cash and cash equivalents | 19,320 | - | 19,320 |
| 31,542 | - | 31,542 | |
| TOTAL ASSETS | 53,961 | - | 53,961 |
| EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT | |||
| Called up share capital | 1,490 | - | 1,490 |
| Share premium | 6,791 | - | 6,791 |
| Reverse acquisition reserve | (4,695) | - | (4,695) |
| Other reserves | 720 | 190 | 910 |
| Retranslation reserve | 16 | - | 16 |
| Retained earnings | 37,161 | (190) | 36,971 |
| TOTAL EQUITY | 41,483 | - | 41,483 |
| LIABILITIES | |||
| NON-CURRENT LIABILITIES | |||
| Lease liabilities | - | - | - |
| Deferred tax | 1,377 | - | 1,377 |
| 1,377 | - | 1,377 | |
| CURRENT LIABILITIES | |||
| Trade and other payables | 11,096 | - | 11,096 |
| Financial liabilities: | |||
| - Interest bearing loans and borrowings | 5 | - | 5 |
| 11,101 | - | 11,101 | |
| TOTAL LIABILITIES | 12,478 | - | 12,478 |
| TOTAL EQUITY AND LIABILITIES | 53,961 | - | 53,961 |
Consolidated Statement of Financial Position 30 June 2020
| As previously reported ��'000 | Adjustments ��'000 | As restated ��'000 | |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Goodwill | 9,680 | - | 9,680 |
| Intangible assets | 14,059 | - | 14,059 |
| Property, plant and equipment | 5,262 | - | 5,262 |
| 29,001 | - | 29,001 | |
| CURRENT ASSETS | |||
| Trade and other receivables | 12,987 | - | 12,987 |
| Cash and cash equivalents | 25,383 | - | 25,383 |
| 38,370 | - | 38,370 | |
| TOTAL ASSETS | 67,371 | - | 67,371 |
| EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT | |||
| Called up share capital | 1,493 | - | 1,493 |
| Share premium | 6,967 | - | 6,967 |
| Reverse acquisition reserve | (4,695) | - | (4,695) |
| Other reserves | 1,372 | 228 | 1,600 |
| Retranslation reserve | 50 | - | 50 |
| Retained earnings | 45,514 | 141 | 45,655 |
| TOTAL EQUITY | 50,701 | 369 | 51,070 |
| LIABILITIES | |||
| NON-CURRENT LIABILITIES | |||
| Lease liabilities | 3,399 | - | 3,399 |
| Deferred tax | 2,169 | (186) | 1,983 |
| 5,568 | (186) | 5,382 | |
| CURRENT LIABILITIES | |||
| Trade and other payables | 9,796 | - | 9,796 |
| Financial liabilities: | |||
| - Lease liabilities | 1,068 | - | 1,068 |
| Current tax payable | 238 | (183) | 55 |
| 11,102 | (183) | 10,919 | |
| TOTAL LIABILITIES | 16,670 | (369) | 16,301 |
| TOTAL EQUITY AND LIABILITIES | 67,371 | - | 67,371 |
Company Statement of Financial Position 30 June 2019
| As previously reported ��'000 | Adjustments ��'000 | As restated ��'000 | |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Investments | 15,147 | 1,692 | 16,839 |
| 15,147 | 1,692 | 16,839 | |
| CURRENT ASSETS | |||
| Trade and other receivables | 808 | - | 808 |
| Cash and cash equivalents | 594 | - | 594 |
| 1,402 | - | 1,402 | |
| TOTAL ASSETS | 16,549 | 1,692 | |
| ## 30 June 2020 |
| As previously reported | Adjustments | As restated | |
|---|---|---|---|
| £'000 | £'000 | £'000 | |
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Owned Property, plant and equipment | 3 | - | 3 |
| Investments | 15,142 | 2,374 | 17,516 |
| 15,145 | 2,374 | 17,519 | |
| CURRENT ASSETS | |||
| Trade and other receivables | 797 | - | 797 |
| Cash and cash equivalents | 396 | - | 396 |
| 1,193 | - | 1,193 | |
| TOTAL ASSETS | 16,338 | 2,374 | 18,712 |
| EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT | |||
| Called up share capital | 1,493 | - | 1,493 |
| Share premium | 6,967 | - | 6,967 |
| Other reserves | 1,372 | - | 1,372 |
| Retained earnings | 3,550 | 2,374 | 5,924 |
| TOTAL EQUITY | 13,382 | 2,374 | 15,756 |
| LIABILITIES | |||
| CURRENT LIABILITIES | |||
| Trade and other payables | 2,956 | - | 2,956 |
| TOTAL LIABILITIES | 2,956 | - | 2,956 |
| TOTAL EQUITY AND LIABILITIES | 16,338 | 2,374 | 18,712 |
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