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D4T4 Solutions PLC
11 July 2023
 

11 July 2023

 

D4t4 Solutions Plc

 

Final Results for the year ended 31 March 2023

 

Significant ARR growth, improved go-to market approach beginning to deliver

 

 

D4t4 Solutions Plc (AIM: D4T4, "the Group", "D4t4"), the data solutions provider, announces its final results for the year ended 31 March 2023.

 

Financial Highlights

 

·      Annual recurring revenue* (ARR) up 19% to £16.7 million (FY22: £14.0 million)

·      Total Revenue down 12.6% to £21.4 million (FY22: £24.5 million), but Software Revenue (excluding third-party hardware) up 9.6% to £19.1 million (FY22: £17.5 million)

·      ARR as percentage of Software Revenue increased to 89% (FY22: 80%)

·      Gross profit margin of 60.2% (FY22: 51.9%) increased due to a greater proportion of higher margin Celebrus software revenue.

·      Adjusted profit before tax** of £3.8 million (FY22: £3.3 million), and statutory profit before tax of £2.4 million (FY22: £1.8 million)

·      Diluted adjusted EPS of 7.74p (FY22: 7.11p) and diluted basic EPS of 5.18p (FY22: 4.14p)

·      Proposed final dividend of 2.15p (FY22: 2.07p), making a total dividend for the year of 3.03p (FY22: 2.92p), an increase of 3.8%

·      Year-end cash position of £17.2 million (FY22: £11.4 million)

 

Operational Highlights

 

·      Unified Celebrus brand now offering Marketing and Fraud functionality according to use case providing improved traction.

·      The direct sales channel created during the year is performing well, and with the marketing investment, produced sales pipeline growth of 27 percent during the year whilst the value of proposals out with potential and existing customers increased fourfold.

·      Addition of several new customers including a healthcare company in the US, a bank in Spain, and an insurer in APAC

·      Strong upsell into existing customers, including additional features for a large US bank, a renewal and consolidation upsell for a large global bank that included a fraud component, and a large renewal for another global bank also incorporating fraud capabilities.

·      The Prickly Cactus team performed well, and the earn-out target was achieved six months ahead of schedule which has accelerated our development of a Customer Success team.

·      Launch of CX Vault, the first-of-its-kind "no party" cookie-less data solution

·      Launch of CDI for Salesforce offering Salesforce customers rapid deployment of Celebrus technology focused on digital identity verification.

·      Enhancement of Celebrus' Digital Identity Verification capabilities with cross-domain continuance, for multi-brand organisations.

 

 

Current trading and Outlook

 

·      In the Marketing world, there is a growing need for better, real-time data, so that brands can improve their customer experience and build better relationships

·      The Group's goal for the year ahead is to deliver significant growth with a focus on new logo sales

·      Continued investment into sales and marketing activities and product development while focused on the generation of healthy profits and cash for future investment

·      Group trading to date is in line with expectations for FY24, with the US market showing particular strength

 

 

* ARR (Annual Recurring Revenue) is the amount of revenue currently contracted at a point in time that is expected to recur within the next twelve months.

 

** Adjusted profit before tax is calculated before amortisation of intangibles, restructuring costs, acquisition costs, foreign exchange gains/losses and share based payment charges.

 

 

Bill Bruno, CEO of D4t4 Solutions, said:

 

"As an organisation, our journey of building a culture focused on selling software through a direct sales channel continues to develop according to the strategy we have put in place over the past year and a half. I'm pleased with the effort from the team globally, and we will continue to improve our investments and strategy in a data-driven manner. We have transformed quickly and efficiently as a business, and that speed will continue alongside the growing pipeline. We have started the new financial year well and we are confident in our ability to deliver growth."

 

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as retained and applicable in the UK pursuant to S3 of the European Union (Withdrawal) Act 2018 ("MAR").

 

 

Enquiries

 

D4t4 Solutions Plc

Bill Bruno, Chief Executive Officer

Ash Mehta, Chief Financial Officer

 

+44 (0) 1932 893333

investors@d4t4solutions.com

 

finnCap (Nominated Adviser & Joint Broker)

Julian Blunt / Edward Whiley, Corporate Finance

Alice Lane, ECM

 

+44 (0) 20 7220 0500

Canaccord Genuity (Joint Broker)

Simon Bridges / Andrew Potts

 

+44 (0) 20 7523 8000

 

About D4t4 Solutions plc

 

D4t4 Solutions plc (AIM: D4t4) was founded around a passion for helping brands improve their relationships with their consumers via better data.

Supporting customers in financial services, retail, travel, healthcare, and telecommunications across over 27 countries, D4t4 enables businesses to make smarter, informed decisions via Celebrus, the company's flagship first-party data product suite. Celebrus automatically captures, contextualises, and activates user-based behavioural data in real-time across all digital channels. Through behavioural biometrics and analytics, Celebrus helps companies prevent fraud before it happens. Celebrus Cloud provides an enterprise platform that automates and enables organisations to get better value from the Celebrus software in a more efficient manner.

The Group has offices in the UK, USA, India, and Australia with key talent in all markets to drive the growth of the business. Celebrus is fully compliant with all major data privacy regulations and the Group is accredited to ISO27001: Information Security Management.

 

For more information, please see www.d4t4solutions.com

Chairman's statement

 

The Group has made strong progress over the last twelve months, and whilst the results fell short of earlier expectations, the underlying trends are very positive with strong growth in ARR and our strongest pipeline ever heading into a new financial year, and our investment into people and systems making the business more robust and scalable for the next stage of growth. Moreover, the market trends against third party cookies, and the massive rise in financial fraud play to our strengths as we continue to increase investment into sales and marketing to further build the pipeline.

 

In the financial year we recorded increased software revenues and ARR, partly based on some impressive new customer wins in various sectors including banking, insurance, and healthcare. We also had significant upsell into existing customers, including first-time Celebrus Fraud wins, as well as a number of large three-year renewals demonstrating the value-add our products provide and the long-term commitment that customers are prepared to make.

 

Our acquisition of Prickly Cactus in 2021 has proved to be valuable in helping us strengthen our account management function, and the vendors met their earn-out target six months ahead of the target date, contributing to our Software revenue growth in the year.

 

Our investment into the product range continued with two updates of our Celebrus platform to enhance functionality, along with the launch of CX Vault, the cookie-less no party solution, and the joint launch of CDI (Customer Data Integration) for Salesforce enabling Salesforce customers to switch on Celebrus features in a matter of hours and have them integrated with the Salesforce Marketing Cloud.

 

This progress has been made during a period of economic uncertainty, and it is a great testament to our leadership team and all of our employees around the world. We thank them sincerely for their efforts. The work we have put in to create a sales-led organisation with a vibrant culture of empowerment and accountability is showing results.

 

At the board level, after the year end, we were delighted to have appointed Helen Gilder as a non-executive director and Chair of the Audit Committee. Her previous experience as a tech company CFO as well as currently being NED and audit chair of an AIM tech business made her a strong candidate for the role. Helen takes over the Audit Committee chair role from me, and this is the first step in our search for a new Chair of the board to succeed me when, in line with good corporate governance, I step down towards the end of this calendar year, having served as Chair for almost nine years. A search has commenced, and we will provide further updates in due course. The board now consists of four independent non-executive directors and two executive directors.

 

Outlook

 

We started the new financial year with a strong pipeline, and a leadership team structured clearly on the delivery of new customer wins, increased revenues and customer satisfaction. The Group has a healthy cash balance to fund necessary investments into growth and I'm delighted to report that the Board is highly confident in the Group's strategy and our ability to deliver growth and create significant shareholder value in the coming years.

 

 

Peter Simmonds
Chairman

11 July 2023

 

 

Chief Executive Officer's statement

 

Our transformational journey to becoming a software sales organization continues to progress, and our focus on growing the core business of selling Celebrus software has developed well with further investments into our strategy for Sales and Marketing.

 

While the financial year ended in a frustrating manner with the delay of two contract signings, I'm pleased to report a good set of financial results for the year ended 31 March 2023 ("FY23") with Software Revenue up by 9.6% during the year and a healthy growth in ARR of 19%.

 

Strategy and Market trends

 

We have moved into the next phase of execution of the strategy to further drive both new logos and existing client growth. With our focus of selling Celebrus software and functionality for Marketing and Fraud use cases, we have rebranded Celebrus CDM to Celebrus Cloud, and enabled the two functionalities to be used concurrently in a single installation. As we continue this journey, our goal is simple: to build strong relationships between brands and their consumers via better data, for both marketing and fraud. This is evidenced by the numerous conversations we are having with Celebrus marketing customers about utilisation of the fraud functionality.

 

In the Marketing world, relationships are growing as a result of engaging experiences and those experiences are driven by better, real-time data. Digital challenges for Marketing have continued to expand to three main areas in which Celebrus excels: Digital Identity Verification, Data Contextualisation and Accuracy, and Data Connectivity. Our "Identity Module" provides the ability for brands to compliantly maintain digital profiles of anonymous and authenticated individuals in a way that most other solutions cannot. Our tag-free data capture, ability to provide that data in milliseconds, and our ability to connect that data in any format to any system that a brand may require, further differentiate us from our competitors in the industry.

 

In the Fraud world, consumers need to be protected by better data in the moment. Fraudsters continue to grow in sophistication, and brands need more data at their fingertips in real-time to have a chance of protecting themselves and their consumers by restricting fraudsters before they can even attempt a fraudulent transaction. Our ability to capture all of that data, combined with our Identity capabilities, sets us apart from our competitors, making Celebrus a significant addition for brands who are trying to do more to counter fraud using their own, first-party datasets. 'The sophistication and configurable granularity of our solution, combined with the rising level of threat, means that the 'black box' approaches of competitors will no longer be considered adequate protection for consumers'. With millisecond data capture and contextualisation, our Celebrus platform ultimately helps brands catch the fraudster before the fraud.

 

Products and technologies

 

We will continue to find opportunities to innovate our Celebrus platform to maintain differentiation in the Marketing and Fraud world. We will do this with our twice-yearly product releases and via the partnerships and integrations we continue to build.

 

During the year, we brought a significant set of features to the market to enhance the capabilities of Celebrus. We launched the first-of-its-kind "no party" data solution in CX Vault that is truly cookie-less. We also enhanced our Digital Identity Verification with cross-domain continuance, and we developed Celebrus Cloud to create our CDI for Salesforce offering and furthered support for the Google Cloud Platform.

 

Our technology focus is on innovation and differentiation and the ability to cater for the ever-growing needs of our customers, and we will continue to take input from the field teams and customers to ensure we are delivering upon our promises.

 

Route to market

 

This past year had some great wins for our business. On the new logo front, we have added several to the roster including a healthcare company in the US, a bank in Spain, and an insurer in APAC. Amongst existing customers, we also had considerable success including an upsell of features to a large US bank, a renewal and consolidation upsell for a large global bank that included a fraud component, and a renewal for another global bank that is now exploring Fraud as well.

 

Our pipeline visibility continues to improve and grow such that at the end of this past year the total sales pipeline grew by 27 per cent while the value of proposals out with potential and existing customers increased fourfold, providing strong visibility into performance in the new year, and reflecting the investment into sales, marketing, and customer success.

 

Our vertical focus has also expanded. While we continue to drive business in Financial Services, Healthcare, and Insurance as key markets we have also achieved traction in Travel and Retail. Our strong belief is that Celebrus can play a role for any organisation looking to be data-driven, and we will continue to expand our footprint in any verticals where it makes sense and proves to be fruitful. Continued changes to HIPAA1 compliance in US healthcare resulting in the limitation of usage of tracking technologies including third party cookies, has highlighted the benefits of our Celebrus first-party data solution for that vertical.

 

We have added Business Development Representatives (BDRs) to our Sales organization to increase further the rate of lead generation.

 

The acquisition of Prickly Cactus in August 2021 has proven successful in uplifting our customer success capabilities, and they achieved their earnout targets in March 2023, six months ahead of schedule. Consequently, they have now been formally integrated into a newly established Customer Success team for the International and the US markets. These investments and structural changes will ensure Sales spends their time selling new logos, and not on other areas of the business.

 

Partners

 

Our partners will always be important to the business, and we have expanded the roster to now include several consulting partners. This is for scale, but also for business development. These consulting firms are trusted partners of their customers, and they also know the challenges that customers are facing first-hand. This presents a great opportunity to create more potential revenue streams for the business.

 

We continue to innovate and grow our go-to-market offerings with technology partners such as Teradata, Pegasystems, Salesforce, and others. Each of these presents an opportunity for us to package up a combination of Celebrus features and sell them in a straightforward manner to land and expand in accounts where those partners are already active. The more we simplify that initial offering, the easier it is for these partners to position Celebrus with their customers and internal teams.

 

Branding

 

We continually monitor the impact of our marketing, and evolve our positioning based on feedback from events, the sales process and conversations with our customers; we are not afraid to make quick pivots as the market changes and adapts. The 'CDP (Customer Data Platform)' label is one example; as a result of overuse and inappropriate application, it has become a source of confusion and we have moved away from using it to describe what we do. Our objective is for our branding to be accessible to non-specialist readers, to the point, and relevant to the various data-related challenges faced by our current and future customers.

 

Our employees

 

We have continued to restructure the business to create opportunities for growth, but to also ensure that we have teams of people working together towards common goals. While we are a global business, we need to ensure that people across the globe are aligned and working with the same level of accountability in the business. We also need to ensure we have strong managers across the business to improve processes and create efficiencies along the way.

 

We have continued to invest in our Security team and operations, and we take that very seriously. It's important to stay at the forefront of information and cyber security as we continue to grow our Celebrus Cloud business. We have deployed a Security Operations Center (SOC) and we have revamped our policies both internally and externally to protect our employees, our company, and our customers.

 

I'd like to thank our global team for their contributions in this past year and their diligence as we continue to make changes across the business to set up for scale and growth. Our team has taken that in its stride, and it has been very uplifting to see people rise to the challenge and work together to build a better D4t4.

 

Outlook

 

Our goal for the year ahead is to deliver ARR growth and shareholder value with a focus on sales. New logos and growing existing accounts are our core area of focus. We are becoming a far more sales-focused organisation, and that culture will drive the winning attitude needed to sustain the growth we know this business can deliver.

 

We will continue to invest into sales and marketing activities and product development while ensuring we can still generate healthy profits and cash for future investment. Everything we do, from delivery to sales to everything in between will be measured. We will continue to bring that data and transparency to the market whenever appropriate.

 

While we are focused on growing our own business, we will also continue to monitor the space for potential acquisition opportunities to bring more capabilities into Celebrus.

 

We have started the new financial year with a strong pipeline and we are confident in our ability to deliver growth in this new financial year.

 

Bill Bruno
Chief Executive Officer

 

1 The United States Health Insurance Portability and Accountability Act 1996

 

 



 

Chief Financial Officer's Report

 

Overview

 

This was a year of investing into building the sales pipeline, and ensuring the business is scalable and operating efficiently to execute the forthcoming growth. The investment required was managed by refreshing and renewing certain teams in the business to contain the cost base at a similar level to last year. This, coupled with tight management of trade debtors and our cash balance, leaves us at the year end with a strong balance sheet to fund future growth expected from the larger pipeline.

 

Income Statement

 

Due to delays in the signing of two contracts before the year end, Group Revenues were £21.4m (FY22: £24.5m). However, Software Revenues, comprising license revenues, managed services, support and maintenance and implementation services, but excluding highly variable, low margin third-party hardware revenues, were up 9.6% to £19.1m (FY22: £17.5m).

 

Equally significantly, ARR grew 19.3% to £16.7m (FY22: £14.0m) and accounted for 89% (FY22: 80%) of Software Revenues for the year. Within the £2.7 million of ARR growth, contract wins accounted for a net of £1.8 million with £0.9 million being due to foreign currency movements, arising from the strong US Dollar impacting on our predominantly USD-denominated ARR.

 

The gross margin was 60.2% (FY22: 51.9%) due to a smaller proportion of low margin hardware revenues. Excluding hardware revenues and cost of sales, the underlying Software gross margin was 68.8% (FY22: 67.8%).

 

Operating expenses continued to be tightly controlled, falling slightly during the year to £10.8 million (FY22: £11.0 million).

 

The adjusted profit before tax was £3.8 million (FY22: £3.3 million), whilst the unadjusted profit before tax was £2.4 million (FY22: £1.8 million). The difference between the adjusted and unadjusted figures is due to a charge for share-based payments arising from share option grants during the year of £0.9 million (FY22: £0.7 million) and restructuring costs of £0.5 million (FY22: £0.4 million), amortisation of intangible assets of £0.3 million (FY22: £0.3 million) reduced by foreign exchange gains of £0.3 million (FY22: loss of £0.1 million).

 

The average number of employees increased slightly during the year to 151 (FY22: 149). Although we increased investment into Sales and Marketing this was offset by redundancies of certain roles across the Group.

 

Foreign currency impact

 

The foreign currency markets remained volatile during the last few months of the year. This impacts the Group which has around 70% of revenues in US Dollars, but approximately 30% of Group expenses. The Group's tighter policies and management of foreign currency risk along with the strengthening of the US dollar during the year resulted in a foreign currency gain of £0.3 million (FY22: loss £0.1 million).

 

 

Taxation

 

Taxable profits were slightly higher for the year and the tax charge was higher at an effective rate of 11.5% (FY22: 3.9%). This was driven by a higher tax charge in the United States and an under provision in last year's Group charge, but was reduced by our significant investment into research and development, much of which qualifies for R&D and Patent Box tax credits in the UK. The increase in the corporation tax rate to 25% in the UK from 1 April 2023, along with changes to qualifying costs under the UK R&D tax credit scheme (which will result in smaller claims being made in future), may produce a higher effective tax charge in future periods.

 

Financial position

 

The Goodwill balance of £9.4 million (FY22: £9.4 million) is comprised of goodwill from the acquisition of Celebrus in 2015, and the acquisition of Prickly Cactus during 2021. The Other intangible assets balance of £0.8 million (FY22: £0.8 million) is comprised of purchased IPR, trade names and capitalised development costs. The Group expenses the majority of its R&D costs and capitalised just £0.2 million in the year (FY22: £0.2 million). The amortisation related to non-acquisition related goodwill amounted to £0.3 million (FY22: £0.3 million).

 

Property plant and equipment fell to £0.6 million (FY22: £4.2 million) following the decision to sell the freehold property, as described below.

 

Trade debtors were £4.9m (FY22: £25.0m) and of that amount, £4.8m had been received by the end of June. Credit risk is not a major risk for the Group and bad debt write-offs during the year were nil (FY22: nil).

 

Trade creditors decreased to £0.6 million (FY22: £0.8 million); this was due to normal operating cycles. The Group seeks to pay all suppliers within terms and the supplier payment days at the year-end were 14 days (FY22: 25 days). Deferred revenue decreased to £9.6 million (FY22: £14.2 million).

 

The cash balance at the year-end was £17.2 million (FY22: £11.4 million).

 

Cash flow and funds

 

The Group generated net cash from operating activities of £13.7 million (FY22: net cash used £0.7 million) primarily due to movements in working capital from the delayed payment of debtors at the last year end.

 

Financing activities in the year were £7.8 million (FY22: £1.5 million) comprised mainly of normal dividends paid of £1.2 million (FY22: £1.1 million), the special dividend of £5.0m (FY22: nil) and a net purchase of own shares of £1.5 million (FY22: £0.4 million).

 

Investing activities resulted in an outflow of £0.1 million (FY22: outflow of £0.6 million). With higher interest rates and a healthy cash balance net interest income was £337,000 (FY22: £1,000), set off principally against capitalisation of development costs of £247,000 (FY22: £242,000).

 

The Group continues to be debt free and maintains a robust financial position. The healthy cash balance is important not just to enable the Group to invest in future growth as appropriate, but also to counter any concerns about vendor risk from our customers, who are typically large multinational businesses.

 

Annual Recurring Revenue

 

We define ARR as the annual amount of recurring revenue contracted with a customer, at a given point in time. As a recognised driver of shareholder value in software businesses we use this as one of our primary metrics.

 

Group ARR grew by £2.7m to £16.7 million (FY22: £14.0 million) during the year. The current ARR is comprised of Licenses of £9.1 million (FY22: £6.3 million) and Support and Maintenance of £7.6 million (FY22: £7.7 million).  A major contributor to the growth was the conversion of existing Celebrus Marketing customers under perpetual license to term licenses with ARR. This brings most of our customers to a term license basis and all new proposals to prospective customers are being issued as term licenses.

 

Of the growth of £2.7 million during the year, £1.9 million is from contract wins with a further £0.8 million arising from exchange rate movements due to a large proportion of Group contracts being in US Dollars.

 

Acquisition of Prickly Cactus

 

In August 2021, the Company acquired Prickly Cactus Limited ("Prickly Cactus"), a UK data and analytics consultancy, for up to £0.75 million, to help deepen our relationships with existing customers identifying opportunities for greater customer engagement and satisfaction as well as helping develop relationships with new customers and partners.

 

A sum of £0.5 million was held as Deferred Consideration in the Statement of Financial Position contingent upon the team's contribution to existing customer growth and the acquisition of new customers in the period from acquisition to September 2023. The target was achieved in March 2023 and the amount was paid out in the form of £0.25 million in cash and £0.25 million as 111,905 Ordinary shares, an average price of 223.4p.

 

Investment into systems to support growth

 

The investments into systems for, amongst others, sales and marketing, finance, contract management and HR are providing the leadership team with increased information and granularity to better manage the business. This has allowed us to better allocate resources, amend customer pricing and restructure our internal teams to create efficiencies that would otherwise not have been possible.

 

Property

 

With the move to hybrid working and the consequent reduced utilisation of our office space in all of our locations around the world, during the year our freehold property in the UK was placed up for sale. The asset has therefore been redefined in our statement of financial position to Assets held for sale at a carrying value of £3.0 million. In the current economic environment, the likely proceeds and timing of the sale are uncertain. Nevertheless, the UK office will be relocated to a lease office facility in the second half of the financial year.

 

Earnings per share

 

Basic EPS for the year was 5.29p (FY22: 4.21p) and diluted basic EPS was 5.18p (FY22: 4.14p). The basic figure has been calculated using the weighted average number of shares in issue being 40,004,526 (FY22: 40,240,799) and the diluted figure using 40,830,043 (FY22: 40,966,020).

 

Adjusted basic EPS was 7.90p (FY22: 7.24p) and adjusted diluted EPS was 7.74p (FY22: 7.11p) following adjustments for amortisation, share based payments, exceptional items, foreign exchange expense and tax on these adjustments.

 

Dividend

 

During the year, as well as ordinary dividends of £1.2 million (FY22: £1.1 million), the Company paid a special dividend of 12.5p per share (FY22: nil) totaling £5.0m.

 

The Board is today proposing a final dividend, subject to shareholder approval at the 2023 AGM, of 2.15p per share (FY22: 2.07p), which along with the interim dividend paid of 0.88p per share (FY22: 0.85p) in January 2023 brings the full year dividend to 3.03p per share (FY22: 2.92p), an increase of 3.8%. The final dividend is expected to be paid on 25 August 2023 to shareholders on the register as at the close of business on 21 July 2023.

 

Purchase of own shares

 

During the year, the Company undertook a share buyback programme to acquire ordinary shares of 2p in the capital of the Company. The shares will be held for the purpose of satisfying future obligations in relation to its employees' or other share schemes, thereby mitigating dilution for existing investors.

 

By 31 March 2023, 536,298 shares had been acquired at an average price of 243.3p and following the issue of treasury shares to satisfy share option exercise and the deferred consideration on the Prickly Cactus acquisition this brought the number of shares held in Treasury to 608,765 (FY22: 224,932).

 

Equity

At the year end, the Group had £27.4 million (FY22: £31.9 million) attributable to the shareholders of the company. The decrease in the year was principally made up of retained earnings in the year of £2.1 million (FY22: £1.7 million) set off against dividends paid during the year of £6.2 million (FY22: £1.1 million), share buybacks of £1.5 million (FY22: £0.4 million) with the balance of £1.2 million (FY22: £0.7 million) attributable to share based payments.

 

 

Ash Mehta
Chief Financial Officer

 

 

 

 

 

 

 

 



 

Consolidated income statement for the year ended 31 March 2023

 

 




Note

2023

 

2022




 

£'000


£'000

Continuing operations

 






Revenue


3

21,369

 

24,459


Cost of sales



(8,497)


(11,755)

Gross Profit

 



12,872

 

12,704


Administration expenses



(10,833)


(11,000)


Other operating income



15

 

58

Profit from operations



2,054

 

1,762


Finance income



373


22


Financing costs



(36)


(21)

Profit before tax


4

2,391


1,763


Tax


 

(274)


(68)

Attributable to equity holders of the parent

 

2,117


1,695

 

 

Earnings per share from continuing operations attributable to the equity holders of the parent

 

 




 

Statutory

 







Basic


5

5.29p


4.21p


Diluted


5

5.18p

 

4.14p

 

 

 

 

Consolidated statement of comprehensive income for the year ended 31 March 2023

 

 





2023

 

2022

 




 

£'000


£'000

 

Attributable to equity holders of the parent

 

2,117

 

1,695


 

Other comprehensive income:

 





 

Items that will not be reclassified to profit or loss

 





 


Gains on property revaluation

 

(300)


70

 


Exchange differences on translation of foreign operations

 

204


(21)

 

Total comprehensive income for the year attributable






to equity holders of the parent


 

2,021

 

1,744

 

           

Consolidated statement of changes in equity attributable to

Equity Holders of the Parent for the year ended 31 March 2023

 

 

 

 


Share capital

Share premium

Merger reserve

Revaluation reserve

Treasury shares

Retained earnings

Total £'000









Balance at 1 April 2021

808

3,365

5,981

(542)

20,034

Dividends paid

 -

 -

 -

 -

(1,147)

Purchase of own shares

 -

 -

 -

 (377)

 -

Issue of new shares: exercise of share options

1

-

50

-

-

Settlement of share-based payments

 -

 -

 -

249

(140)

Share-based payment charge

 -

 -

 -

 -

619

Transactions with equity holders

1

 -

50

 -

(128)

(668)

(745)

Profit for the year

 -

 -

 -

 -

1,695

Other comprehensive income

 -

 -

 -

 -

(21)

Total comprehensive income

 -

 -

 -

70

 -

1,674

1,744

Balance at 1 April 2022

809

3,365

6,031

1,310

(670)

21,040

31,885

Dividends paid

 -

 -

 -

 -

(6,194)

Purchase of own shares

 -

 -

 -

 (1,488)

 -

Settlement of share-based payments

 -

 -

250

694

(679)

Share-based payment charge

 -

 -

 -

 -

856

Transactions with equity holders

-

 -

250

 -

(794)

(6,017)

(6,561)

Profit for the year

 -

 -

 -

 -

2,117

Other comprehensive income

 -

 -

 -

 -

204

Total comprehensive income

 -

 -

 -

(300)

 -

2,321

2.021

Balance at 31 March 2023

809

3,365

6,281

1,010

(1,464)

17,344

27,345

 



 

Consolidated statement of financial position as at 31 March 2023

 

 

 

 




Note

2023

 

2022

 




 

£'000

 

£'000

 

Non-current assets

 





 


Goodwill


 

9,446


9,446

 


Other intangible assets


 

806


808

 


Property, plant and equipment

 

607


4,012

 


Trade and other receivables

7

942


-

 


Deferred tax assets


 

212


232

 




 

12,013


14,498

 

Current assets

 


 

 


 


Trade and other receivables

7

7,561


27,385

 

 


Tax receivables



15


573

 


Cash and cash equivalents



17,155


11,430

 




 

24,731


39,388

 

Assets in disposal groups classified as held for sale


 

3,000


-

 

Total assets


 

39,744


53,886

 

 




 

 


 

Current liabilities

 


 

 


 


Trade and other payables


8

(2,219)


(7,144)

 


Tax liabilities



(8)


-

 


Deferred income



(9,383)


(14,200)

 


Lease obligations


 

(73)


(54)

 




 

(11,683)


(21,398)

 

Non-current liabilities

 


 

 


 


Lease obligations


 

(148)


(146)

 


Deferred income


 

(173)


-

 


Deferred tax liabilities


 

(395)


(457)

 

 



 

(716)


(603)

 

Total liabilities

 


(12,399)

 

(22,001)

 

 




 

 


 

Net assets


 

27,345


31,885

 

 







 

Equity

 





 


Share capital


 

809


809

 


Share premium account


 

3,365


3,365

 


Merger reserve


 

6,281


6,031

 


Revaluation reserve


 

1,010


1,310

 


Own shares


 

(1,464)


(670)

 


Retained earnings


 

17,344


21,040

 

Attributable to equity holders of the parent

27,345


31,885


 

Consolidated cash flow statement for the year ended 31 March 2023

 

                       




2023

 

2022



Note

£'000

 

£'000

Operating activities

 





Profit before tax


2,391

 

1,763

Adjustments for:

 

 

 



Depreciation of property, plant and equipment

265


391


Amortisation of intangible assets


346


306


Finance income


(373)


(22)


Finance expense


36


21


Share-based payments


856


619


Loss / (gain) on sale of property, plant and equipment

13


(16)







Operating cash flows before movements in working capital

3,534


3,062

 

Decrease / (increase) in receivables


18,882


(14,023)


Decrease in inventories


-


129


(Decrease) / increase in payables


(9,184)


10,171

Cash generated from operations


13,232

 

(661)


Taxes received


472


1

Net cash generated from operating activities


13,704


(660)

Investing activities

 

 

 



Interest received


373


22


Purchase of property, plant and equipment


(173)


(197)


Purchase of intangible fixed assets

(97)


-


Acquisition of subsidiary, net of cash acquired         

-


(200)


Capitalisation of development costs


(247)


(242)

Net cash used in investing activities


(144)


(617)

Financing activities

 

 

 



Dividends paid


(6,194)


(1,147)


Lease repayments


(102)


(98)


Interest paid


(36)


(21)


Purchase of own shares


(1,488)


(377)


Exercise of share options


(15)


109

Net cash used in financing activities


(7,835)


(1,534)

Net increase in cash and cash equivalents

 

5,725

 

(2,811)

 

Cash and cash equivalents at start of year


11,430


14,241

Cash and cash equivalents at end of year


17,155

 

11,430

 

 

 

 



 

Notes to the financial statements

 

1.         General information

 

D4t4 Solutions plc is a public limited company incorporated and domiciled in England and Wales and quoted on the AIM Market, hence there is no ultimate controlling party.

 

2.         Significant accounting policies

 

Basis of preparation

 

The financial statements have been prepared in accordance with International Accounting Standards adopted by the Companies Act 2006 applicable to companies reporting under International Accounting Standards.

 

The financial statements have been prepared under the historical cost convention, with the exception of land and buildings which are held at valuation.

 

The presentation and functional currency of the financial statements is British Pounds and amounts are rounded to the nearest thousand pounds.

 

The financial information contained in this announcement does not constitute the Group's statutory accounts for the year ended 31 March 2023 but is derived from those accounts which have been audited and which will be filed with the Registrar of Companies in due course. 

 

The auditors' report on the Annual Report and Financial Statements for the year ended 31 March 2023 was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or s498(3) of the Companies Act 2006.

 

The 2023 Annual Report will be made available on the Company's website for the purposes of the AIM Rules for Companies on Wednesday 12 July 2023.

 

Going concern

 

The Group and Company's business activities, together with the factors likely to affect its future development, performance and position and the risks and uncertainties have been considered along with any impact from the global economic situation and any further impact of coronavirus.

 

The Directors have reviewed stress tests for future cashflows over the 18 months to 30 September 2024 to ensure there are sufficient financial resources, together with income from existing contracts with a number of customers, to cover budgeted future cashflows. On this basis, the Directors have adopted the going concern basis in preparing these accounts.

 

3.         Business and geographical segments

 

IFRS 8 Operating Segments requires these to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and assess their performance.

 

Whilst having three product groups, the Group operates the business as a single business with no separation into divisions or allocation or people or assets to a particular division. The management team is responsible for all three product groups with no individual having responsibility for a particular product group. This is consistent with the internal reporting for management purposes. Management does however monitor revenues by revenue type.

 



 

Information is presented to the Board on the revenue analysis below:

·      Licenses

·      Celebrus Cloud Hosting, support and maintenance

·      Services

·      Third party products

 

The revenue analysis set out below is consistent with that provided to the Board of Directors.

 





Group







2023


2022







£'000


£'000


Licenses




8,198


6,137


Celebrus Cloud Hosting, support and maintenance

7,771


7,127


Services




3,173


4,194


Software revenues

 

 

19,142

 

17,458


Third party products

 



2,227


7,001


Revenue




21,369


24,459

 

           

 

Major customers (partners) over 10% of revenue

 


2023

2022




£'000

£'000

£'000

£'000





Customer 1

Customer 2

Customer 1

Customer 2










Licenses


2,061

4,444

2,086

1,577


Celebrus Cloud Hosting, support and maintenance


3,583

1,110

2,538

1,159


Services


30

-

2,337

17


Software revenues

5,674

5,554

6,961

2,753

 

Third party products

 

2,227

-

7,001

-

 

Revenue


7,901

5,554

13,962

2,753


 

 

 

 

Geographical information









Group





2023


2022





£'000


£'000


United States of America


11,055


16,859


United Kingdom


3,800


3,962


Rest of Europe


3,745


2,421


Others



2,769


1,217





21,369


24,459

 

 

 

 

 

 

 

 

 

 

 

 

The geographical revenue is determined by the domicile of the customer.

 

4.         Adjusted profit before tax

 

 

 








2023

£'000


2022

£'000


Profit before tax


2,391


1,763


Amortisation of intangible assets


346


306


Share-based payment


856


678


Net foreign exchange differences

(330)


93


Costs related to acquisition during the year

-


36


Restructuring costs

513


390


Adjusted profit before tax


3,776


3,266

 

 

 

5     Earnings per share



 

 

 

 

 

 

The calculation of earnings per share is based on profit attributable to owners of the parent and the weighted average number of ordinary shares in issue during the year.

The adjusted earnings per share figures have been calculated based on earnings before adjusted items. These have been presented to provide shareholders with an additional measure of the Group's year-on-year performance.

 

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares arising from share options granted to employees where the exercise price is less than the market price of the Company's ordinary shares at the year end.

 

Details of the adjusted earnings per share are set out below:

 

 






2023


2022

 






£'000

 

£'000

 

Profit attributable to owners of the parent


2,117


1,695

 

Amortisation of intangible assets

346


306


Share-based payment


856


677

 

Net foreign exchange differences


(330)


93

 

Costs related to acquisition during the year


-


36

 

Restructuring costs




513


390

 

Tax on the adjustments



(340)


(284)

 

Adjusted profit attributable to owners of the parent

3,162

 

2,913






 

 

 

 

 

 

 

 



 

 

 

 

 

 





 

 

2023

No.


 

 

2022

No.

 









 

Basic weighted average number of shares, excluding own shares, in issue

40,004,526


40,240,799

 

Dilutive effect of share options



825,517


725,221

 

Diluted weighted average number of shares, excluding own shares, in issue

40,830,043


40,966,020

 









 









 






2023


2022

 






Pence

per share


Pence

per share

 

Basic Earnings per share



5.29


4.21

 

Diluted Earnings per share



5.18


4.14

 

Adjusted Basic Earnings per share


7.90


7.24

 

Adjusted Diluted Earnings per share


7.74


7.11

 

 

 

 

6.         Dividends

 







2023


2022







£'000

 

£'000

Amounts recognised as distributions to equity holders






Final dividend for the year ended 31 March 2022 of 2.07p (for the year ended 31 March 2021: 2.00p) per share

831


805


Special dividend for the year ended 31 March 2022 of 12.5p

(31 March 2021: nil) per share

5,012


-


Interim dividend for the year ended 31 March 2023 of 0.88p (31 March 2022: 0.85p) per share

351


342







6,194

 

1,147

 

 

The proposed final dividend for the year ended 31 March 2023 of 2.15p is subject to shareholder approval at the AGM and has not been included as a liability in these financial statements. The final dividend is expected to be paid on 25 August 2023 to shareholders on the register as at the close of business on 21 July 2023.

 



 

7.         Trade and other receivables

 

 

Non-current



Group

 



2023

2022




£'000

£'000

Prepayments



181

-

Accrued Income



761

-




942

-

 

 

 

Current



Group

 



2023

2022




£'000

£'000

Trade receivables



4,967

24,992

Other debtors



45

66

Prepayments



1,295

670

Accrued Income



1,255

1,657




7,561

27,385

 








2023

2022




£'000

£'000

Less than 30 days

 

 

 

 

 

 

 

 


1,211

               2,699

31 to 60 days



3,693

                      52

61 to 90 days



-

                      14

91 to 120 days



63

 22,227




4,967

24,992

 

 

The majority of the debtors shown in 31-60 days were received in May 2023.

 

The average credit period taken on sales of goods and services was 108 days (FY22: 111 days).                                                                                    

In accordance with IFRS 9, the Group performed a year end impairment exercise to determine whether any write down in amounts receivable was required, using an expected credit loss model. The expected loss rate for receivables less than 120 days old is 0% and above 120 days has not been considered on the basis of immateriality. In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date.                                                                                    

 

 

 

 

 

 

 

 

 

8.         Trade and other payables

 

 




Group

 



2023

2022

 



£'000

£'000

Trade payables



585

840

Other taxes and social security



382

396

Other creditors



76

1,239

Contingent consideration



-

500

Accruals



1,176

4,169




2,219

7,144

 

There is no material difference between the fair value of payables and their carrying value.                                                                                              

Trade payables comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 14 days (FY22: 25 days). Their carrying value approximates to their fair value.

 

 

10.        Investor presentation

 

The investor presentation will be available on the company's website www.d4t4solutions.com/ later today.

 

Bill Bruno (CEO) and Ash Mehta (CFO) will provide a live presentation relating to the full-year results via the Investor Meet Company platform today at 3.00pm BST.

 

Investors can sign up to Investor Meet Company for free and add to meet D4t4 via:

 

https://www.investormeetcompany.com/d4t4-solutions-plc/register-investor

 

 

10.          Annual Report and Accounts and Notice of AGM

 

The Notice of AGM will be made available, along with the shareholder proxy form and the 2023 Annual Report and Accounts, on the company's website on 12 July 2023 and a notification will be posted to shareholders on the same day for the purposes of the AIM Rules for Companies, and in accordance with the Company's articles of association. Hard copies will also be available from the Company's registered office Windmill House, 91-93 Windmill Road, Sunbury-on-Thames, Middlesex, TW16 7EF.

 

11.        Annual General Meeting

 

The 2023 Annual General Meeting of the Company will be held at 9am BST on Wednesday 9 August at the Company's registered office. This will comprise formal business only. The directors plan to broadcast a Q&A session later in the day at 2pm BST, via the Investor Meet Company platform. Investors can sign up to Investor Meet Company for free and add to meet D4t4 via:

 

https://www.investormeetcompany.com/d4t4-solutions-plc/register-investor

 

 

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