RNS Number : 5258M
Rosslyn Data Technologies PLC
17 September 2019
 

17 September 2019

Rosslyn Data Technologies plc
("Rosslyn", "RDT" or the "Company")

 

Audited Results
For the year ended 30 April 2019

 

Rosslyn Data Technologies plc (AIM: RDT), the provider of a leading cloud-based enterprise data analytics platform, is pleased to announce its audited results for the year ended 30 April 2019.

 

Financial Summary

 

·    Revenue growth of 8.3% to £7.0m (2018: £6.4m).

·    Annual licence fee revenue growth of 9.2% to £5.4m (2018: £5.0m).

·    Operating EBITDA (excluding share-based costs) improved by 75% to a loss of £432,000 (2018: loss of £1.8m).

·    Cash generated from operations of £220,000 (2018: cash used in operations of £3.45m).

·    Cash balance at the year-end of £2.0m (2018: £0.3m), after securing a £1.5m term loan from Clydesdale Bank, of which £1.0 million had been drawn down at year end. Net cash of £373,000 (2018: net debt of £757,000).

·    Administrative expenses reduced by over 10% to £6.0m (2018: £6.9m).

 

Operational Highlights

 

·    Year of consolidation allowing us to accelerate growth in the coming years from a sound base.

·    Significant investment into product development to broaden out the RAPid product offering, adding new tools and functionality.

·    Integrating functionality from the Integritie product suite into our new supplier information management suite (SIM).

·    Secured high value contracts in various sectors including international logistics, civil defence, healthcare and pharmaceuticals, illustrating the broad appeal of our offering across the supply chain to chief procurement officers and chief financial officers in a wide range of sectors.

·    Reduced cost base during the year through implementation of efficiencies in product development.

 

 

Rosslyn Chief Executive Officer, Roger Bullen said;

"Our work in 2019 has laid a solid foundation from which to grow the business further. We are confident of continued growth as we engage in numerous large client opportunities that we hope to be able to announce later this year."

 

 

 

 

 

 

 

 

 

 

Chairman's statement

 

Strategy and operations

 

Following the integration of Integritie in April 2017, last year has been one of consolidation, resulting in investment in product development, further reducing costs, and winning larger value contracts with a broader product offering. Moreover, we were pleased to have achieved a key milestone, with the Group having generated cash from operations for the first time since IPO.

 

The Integritie acquisition brought us additional functionality which has been fully integrated into the Rosslyn platform. We have also invested in new product development features to add tools to broaden out the RAPid product suite. These improvements will allow us to provide greater value to clients by being more embedded into their systems and processes. We have a product suite that we believe makes a material difference to our clients' operations.

 

Our cost base reduced during the year as we made technological efficiencies in our product development and client delivery processes which allowed us to use resources more effectively. We will continue to manage our costs tightly in line with our revenue growth. Our direct competitors are often larger and better funded than us and so we need to ensure that the message of the strength of our product is conveyed forcefully.

 

Despite stiff competition, during the year we secured numerous high value contracts in various sectors including international logistics, civil defence, healthcare and pharma. This illustrates the broad appeal of our offering across the supply chain to chief procurement officers and chief financial officers in a wide range of sectors.

 

We were pleased to have achieved a key milestone, with the Group having generated cash from operations for the first time since IPO. In March we secured bank debt with Clydesdale Bank in the form of a term loan, and this together with our cash balance puts us on a strong footing to continue to invest in growth. Moreover, being recognised as a bankable company by an institution such as Clydesdale, demonstrates confidence in Rosslyn as a maturing business as it prepares for future growth.

 

We have strengthened the Board through the addition of Ash Mehta as Chief Financial Officer in April, and Ginny Warr as Non-Executive Director in May. I took over as Chairman last October and our previous Chairman, John O'Hara, stayed with Rosslyn to assist the transition before stepping down in June. We are extremely grateful to John for his nine years of dedicated service to Rosslyn and wish him well for the future.

 

Outlook

 

We expect this year to be one in which we generate positive operating cash flow allowing us to fund further investment into products and sales channels. To this end, we will continue to manage costs tightly and appropriately in line with the level of new sales wins.

 

The Group is in discussions regarding contracts with additional high value blue-chip targets which would provide upside to the Group. These larger deals take longer to negotiate due to more decision makers being involved in our client organisations. This coupled with the current global economic uncertainty and political uncertainty in the UK means their execution timing can be harder to predict. However, we continue to win new clients, including a large new client in the science-led sustainable technologies sector. Therefore, even though it has been a slower start to the first few months of our new financial year than we had hoped, we are confident in achieving a positive outcome for the year.

 

The strategy continues as before, namely to grow the product offering and client base in the supplier analytics space whilst seeking acquisition opportunities to increase our scale and offering.

 

With a strengthened Board, cash resources, a focused team and an advanced suite of products to address a market in need of data analytics, the Group is well positioned for growth. I look forward to updating you on progress further later this year.

 

 

Chief Executive's statement

 

Strategy

 

This year, we continued with our strategic plan, which is to focus on ensuring the success of our customers and partners by providing them with world-class data-led solutions and business insights that deliver significant and sustainable business value. The demand for our software solutions has been high from enterprise organisations, both end-user customers and partners around the world.

 

Operations

 

During the year, we have made new investments to integrate and further develop our suite of solutions and products on the RAPid platform, adding new tools and capabilities, whilst ensuring the platform and solutions are more efficient, scalable and user friendly. For example, we have capitalised on market demand and focused our software development on the supply chain market, introducing a complete supplier management solution including supplier onboarding, supplier performance management, and contract and document handling.

 

Moreover, we have introduced new technologies based on robotic process automation (RPA), alongside our integrated Neuro Linguistics Programming (NLP) and artificial intelligence. These technologies have enabled us to fully automate processes covering scheduling, extraction, transformation, load, enrichment, classification, and visualisation of spend data, as well as generate error reporting without any human intervention. We believe this to be a first in the market and a true differentiator against our competitors.

 

As well as contributing to better client servicing, these efficiencies have also allowed us to reduce internal costs to bring us closer to a positive EBITDA.

 

These developments demonstrate the versatility of our platform, which gives the user the ability to move from one view of a supplier to the next seamlessly. The improved platform enables our clients to achieve a holistic view of their enterprise data, as they are now able to manage documents, supplier performance, onboarding and other solutions from one easy to access place.

 

The improvements also allow Rosslyn to use the underlying features to enter adjacent markets which could use similar functionality.

 

Through our strong relationship with Microsoft and as a heavy user of their Azure cloud services we ensure that our flagship RAPid product remains at the cutting edge of technological development, enabling scale and efficiencies to be achieved at the lowest possible cost. Microsoft continues to recognise RAPid as one of the top cloud-based platforms in the market and also recognises Rosslyn as a preferred partner, issuing us with its "Co-Sell Recommended Partner" status, a significant achievement for us.

 

Data security remains at the forefront of our deliverables, and we are seeing our clients interested in migrating to their own cloud solutions, requesting our service be included in their cloud "stack" for reasons of data security. This has provided us with new opportunities; we have developed our system to be capable of being containerised and portable from one cloud solution to another. This allows security teams to comply with their company policies and puts us ahead of our competition in terms of flexibility.

 

Through our direct sales team, we have signed a number of new contracts during the year, notably with major global businesses headquartered in Northern Europe. These clients continue to increase in number and value as we drive to uplift our annual recurring revenue and our overall average contract values. The new clients have contributed to our highly diversified and complex client base and provide us with excellent opportunities to demonstrate the scalability, value and efficiency of the RAPid platform to our partners and clients.

 

Whilst the majority of revenues still come from our Direct Sales team, we continue to seek traction through our partnership strategy. We have signed a number of new partnership agreements and continue to roll this programme out around the world.

 

We are now also seeing developments in the market that enable us to expand our offerings to include services covering compliance, logistics, complaints, workflow management, risk, corporate social responsibility and workforce management, all adjacent to the supply chain. We are excited about these new opportunities and our growing capabilities to help clients improve revenue generation, profitability and business efficiencies with us. In the year ahead it is our intention to add to the sales and business development teams as necessary to fulfil the Company's growth ambitions. We have been able to streamline development processes, which has led to an overall decrease in the number of employees compared to previous years. This ensures we are more balanced as a Company with more sales resource to achieve our growth objectives.

 

Our staff have positively contributed to our growth. The two teams of Integritie and Rosslyn are now a single team and we have worked to develop a supportive culture with open communication in which employees are empowered to propose and implement improvements. We are also working to foster closer working between our Sales team and Development team to better identify client needs and incorporate them into our product development plan.

 

Outlook

 

In summary, we are seeing the benefits from the investments that we have made. Our solutions and products are becoming extremely well known and recognised for innovation, and we have a strong unified team of people driving our growth. I would like to join James Appleby and the Board in thanking our employees and shareholders, without whom none of this would be possible. I look forward with confidence to the 2019-20 financial year.

 

Financial performance

 

Revenue

We adopted IFRS 15 a year early last year and so the results shown for the current and prior year are both shown on that basis, without restatement. Revenue for the year grew 8.3% to £7.0m (2018: £6.4m). Underlying annual licence fee revenue showed growth of 9.2% to £5.4m (2018: £5.0m). This growth was underpinned by sales of RAPid to large clients in sectors such as international logistics, civil defence, healthcare and pharmaceuticals.

 

Gross margin

The gross margin percentage increased to 79.7% (2018: 76.1%) as we worked hard to reduce our cloud storage and processing costs through more efficient utilisation of this resource.

 

EBITDA

The increase in revenues and gross margin percentage, coupled with administrative expenses being reduced by 12.6% to £6.0m (2018: £6.9m), has resulted in an EBITDA (excluding share-based costs) improved by 76% to a loss of £432,000 (2018: loss of £1.8m).  

 

Research and development  

We continue to invest significantly into research and development for our product   range. During the year the Group spent £1.1m (2018: £0.7m) on tax relief qualifying research and development in order to broaden out the RAPid product offering, adding new tools and functionality and also fully integrating functionality from the Integritie product suite.  These costs are expensed fully as they are incurred and excluding this investment Operating EBITDA would have been a profit of £0.7m (2018: loss of £0.7m).

 

Loss before income tax

The loss before income tax for the year was   £1.7m (2018: £3.7m). This includes the impact of £1.0m (2018: £1.0m) of amortisation of intangible assets arising from the Integritie acquisition in 2017.  

 

Cash flow and funds

The cash balance at the year-end was £2.0m (2018: £0.3m).   During the year we secured a £1.5m term loan from Clydesdale Bank of which £1.0m had been drawn down at the year end. Part of this drawdown was used in April and May 2019 to repay loan notes taken on in the acquisition   of Integritie totalling £134,000 and £626,000   respectively. Most importantly, for the first time since IPO the Group generated cash from operations.

 

 

 

Financial results

Consolidated statement of comprehensive income

 

 

Note

 Year ended

30 April

2019

£'000

Year ended

30 April

2018

£'000

Revenue

3

6,965

6,433

Cost of sales

 

(1,416)

(1,538)

Gross profit

 

5,549

4,895

Administrative expenses

 

(5,993)

(6,861)

Depreciation and amortisation

 

(1,041)

(1,064)

Share-based payments

 

(125)

(194)

Impairment of goodwill

 

-

(364)

Operating loss

 

(1,610)

(3,588)

Finance income

 

1

-

Finance costs

 

(87)

(101)

Loss before income tax

 

(1,696)

(3,689)

Income tax

 

595

478

Loss for the year

 

(1,101)

(3,211)

Other comprehensive income

 

(27)

(23)

Total comprehensive income

 

(1,128)

(3,234)

 

Loss per share

Basic and diluted loss per share: ordinary shareholders

 

Pence

0.57

Pence

1.76

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of financial position

 

 

 

30 April

2019

£'000

30 April

2018

£'000

Assets

 

 

 

Non-current assets

 

 

 

Intangible assets

 

2,946

3,969

Property, plant and equipment

 

14

23

 

 

2,960

3,992

Current assets

 

 

 

Trade and other receivables

 

1,697

2,150

Corporation tax receivable

 

363

557

Cash and cash equivalents

 

1,960

317

 

 

4,020

3,024

Total assets

 

6,980

7,016

Liabilities

 

 

 

Non-current liabilities

 

 

 

Trade and other payables

 

(126)

(91)

Deferred tax

 

(218)

(291)

Financial liabilities - borrowings

 

(653)

(744)

 

 

(997)

(1,126)

Current liabilities

 

 

 

Trade and other payables

 

(4,018)

(3,771)

Financial liabilities - borrowings

 

(934)

(330)

 

 

(4,952)

(4,101)

Total liabilities

 

(5,949)

(5,227)

Net assets

 

1,031

1,789

 

Equity

 

 

 

Called up share capital

 

963

941

Share premium

 

12,777

12,555

Share-based payment reserve

 

515

390

Accumulated loss

 

(18,241)

(17,140)

Translation reserve

 

(116)

(90)

Merger reserve

 

5,133

5,133

Total equity

 

1,031

1,789

 

 

 

Consolidated statement of cash flows

 

 

 

 Year ended

30 April

2019

£'000

Year ended

30 April

2018

£'000

Cash flows used in operating activities

 

 

 

Cash generated/(used) in operations

 

220

(3,450)

Finance income

 

1

-

Finance costs

 

(87)

(95)

Corporation tax received

 

716

474

Other comprehensive income

 

-

(23)

Net cash generated/(used) in operating activities

 

850

(3,094)

Cash flows used in investing activities

 

 

 

Purchase of property, plant and equipment

 

(10)

(19)

Acquisition of subsidiaries

 

-

(1,188)

Net cash used in investing activities

 

(10)

(1,207)

Cash flows generated from financing activities

 

 

 

New loans in year

 

1,000

278

Repayment of borrowings

 

(441)

(544)

Proceeds from share issuance

 

250

5,056

Costs of share issuance

 

(6)

(457)

Net cash generated from financing activities

 

803

4,333

Net increase in cash and cash equivalents

 

1,643

32

Cash and cash equivalents at beginning of year

 

317

285

Cash and cash equivalents at end of year

 

1,960

317

Reconciliation of loss before income tax to cash used in operations

 

 Year ended

30 April

2019

£'000

Year ended

30 April

2018

£'000

Loss before income tax

(1,696)

(3,689)

Depreciation, amortisation and impairment charges

1,041

1,427

Share-based payment transactions

125

195

Costs to acquire subsidiary

-

151

Finance income

(1)

-

Finance costs

87

101

 

(444)

(1,815)

Decrease in trade and other receivables

453

970

Increase in trade and other payables

211

(2,605)

Cash generated/(used) in operations

220

(3,450)

 

 

Notes to the consolidated financial statements

 

1. General information

Rosslyn Data Technologies plc (the "Company") is a company domiciled in the UK. The address of the registered office is 60 St. Martin's Lane, Covent Garden, London WC2N 4JS. The Company is the ultimate parent company of Rosslyn Analytics Ltd and Rosslyn Data Management Ltd, companies incorporated in the UK, and the ultimate parent company of Rosslyn Analytics, Inc., a company incorporated in the United States of America (collectively, the "Group"). The Group's principal activity is the provision of data analytics using a proprietary form, data capture, data mining and workflow management.

2. Accounting policies

Basis of preparation

The Group's consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards (as adopted by the EU) and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Going concern

Notwithstanding that the Group has made losses in the current year, these financial statements have been prepared on the going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.

The Directors have prepared cash flow statements for the periods to 30 April 2021 to ensure going concern criteria are met. Provided the Group achieves its forecasts for the forthcoming year, the Group will be able to pay its employees and suppliers and be in a cash positive position. Should the Group fall short of its revenue forecast it will need to reduce costs accordingly to maintain cash balance.

Having considered the forecasts and scenario actions for any downturn, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing these financial statements.

 

3. Segmental reporting

Management has determined the operating segments based on the operating reports reviewed by the Executive Directors that are used to assess both performance and strategic decisions. Management has identified that the Executive Directors are the Chief Operating Decision-Maker in accordance with the requirements of IFRS 8 Operating segments.

The determination is that the Group operates as a single segment, as no internal reporting is produced either by geography or division. The Group does view performance on the basis of the type of revenue, and the end destination of the client as shown below.

 

Year ended

30 April

2019

£'000

Year ended

30 April

2018

£'000

Annual licence fees

5,437

4,979

Professional services

1,528

1,454

Total revenue from external customers

6,965

6,433

 

 

Year ended

30 April

2019

£'000

Year ended

30 April

2018

£'000

UK and Europe

5,248

4,615

North America and Rest of the World

1,717

1,818

Total revenue from external customers

6,965

6,433

 

 

4. Operating EBITDA

 

Operating EBITDA is calculated from Operating loss as shown below.

 

 

 

Year ended

30 April

2019

£'000

Year ended

30 April

2018

£'000

Operating loss

(1,610)

(3,588)

Depreciation and amortisation

1,041

1,064

Share-based payments

125

194

Impairment of goodwill

-

364

Acquisition costs

12

150

Operating EBITDA loss

(432)

(1,816)

 

 

5. Loss per share

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

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

 

Year ended

30 April

2019

Year ended

30 April

2018

Loss for the year attributable to the owners of the parent

£1,128,000

£3,234,000

Weighted average number of ordinary shares

192,675,521

183,820,205

 

 

Pence

Pence

Basic and diluted loss per share: ordinary shareholders

0.59

1.76

 

 

 

Annual report and accounts

 

The annual report and accounts will be posted to shareholders shortly and will be available for members of the public at the Company's registered office 60 St. Martin's Lane, Covent Garden, London WC2N 4JS, and on the company's website www.rosslyndatatech.com.

 

Annual General Meeting

 

The Company's Annual General Meeting to be held at 154-160 Fleet Street, Blackfriars, London EC4A 2DQ on 17 October 2019 at 11.00am.

 

 

 

 

 

Rosslyn Data Technologies plc

Roger Bullen, Chief Executive Officer

+44(0)77 7162 3345
+44(0)20 7138 3203

 

Ash Mehta, Chief Financial Officer

+44(0)79 3054 7441
+44(0)20 7138 3203

Cenkos Securities,
Nominated Adviser, Broker

Stephen Keys/Giles Balleny

 

+44(0)20 7397 8924

 

 

Notes to Editors

Rosslyn Data Technologies plc, (AIM: RDT) is a leading provider of a cloud-based big-data analytics platform. The company provides analytical services by combining four key technologies: bulk data extraction; cleansing; enrichment; and visualisation, through a single cloud platform enabling users with detailed data to make more informed decisions. Rosslyn's RAPid platform is the Group's primary product available to its multinational customers. Further information can also be found on the Company's website at:   www.rosslyndatatech.com


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