REG - Pebble Beach Sys Grp - Half-year Report
21/08/2024 07:00
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RNS Number : 1645B Pebble Beach Systems Group PLC 21 August 2024
Pebble Beach Systems Group plc
Results for the half-year ended 30 June 2024
Pebble Beach Systems Group plc (AIM: "PEB", "Pebble" or the "Group"), a
leading global software business specialising in playout, content management,
and IP Control solutions for the broadcast and media technology markets, is
pleased to announce its unaudited half-year results for the six months ended
30 June 2024 ("H1 24").
Financial highlights
· Order intake in the period was up 12% year on year to £4.9m (H1
23: £4.4m)
· Service Level Agreement ("SLA") revenue up 21% to £3.1m (H1 23:
£2.5m) as a result of the on-going SLA price rises that have been implemented
by the Group. As a result, higher margin recurring revenue accounted for 58%
of total Group revenue in the period (H1 23: 46%). Overall Group revenue for
the six months to 30 June 2024 was £5.3m (H1 23: £5.5m)
· Adjusted EBITDA(1) of £1.4m (H1 23: £1.4m) was flat against H1
last year, but with an improved EBITDA margin of 27% from increased level of
higher margin SLA recurring revenue (H1 23: 25%)
· Profit before tax of £0.3m (H1 23: £0.2m)
· Adjusted earnings per share up to 0.3p (H1 23: 0.2p)
· Net cash generated from operating activities (after interest
paid) £1.2m (H1 23: £1.7m)
· Gross bank debt reduced by £0.5m in last six months to £5.1m as
at 30 June 2024. Net debt at 30 June 2024 was £4.8m (H1 23: £5.1m)
(excluding IFRS 16 leases) representing a net debt/last 12 month Adjusted
EBITDA(1) of c.1.3x
Operational highlights
· Launched new IP-native PRIMA platform at the NAB trade show in
Las Vegas. Investment in increasing the feature set for PRIMA has continued as
planned.
· Investment in the Group's sales team to drive revenues; Sally
Wallington appointed as SVP of Sales. Sally brings 20 years of industry sales
experience and will drive our projected increase in project orders. In
addition to Sally, the Group has strengthened its presence in Europe with the
appointment of a new VP of Sales in the DACH region.
· We continue to adjust the prices of our SLAs to ensure charges
are at the appropriate level for the standard of support, which has driven the
increase in our recurring revenue and a stronger revenue mix. This has
resulted in more multi-year SLA renewal orders being placed.
Current trading and outlook
· The Group's weighted pipeline value remains strong at £9.8m, 13%
up on last year's value (June 23: £8.7m).
· In line with previous years and based on the strength of the
weighted pipeline, we are expecting to deliver 2024 market expectations.
· Reduced hardware lead times and operational readiness means
project orders landed in H2 can be turned around quickly and delivered before
the end of the year.
· Increased number of multi-year SLAs booked, giving better
visibility of future revenues.
John Varney, Non-Executive Chairman of Pebble Beach Systems Group plc, said:
"The Group continues to demonstrate resilience with increased order intake in
spite of ongoing challenging external market conditions causing customers to
continue delaying decisions on upgrades. The Group entered H2 2024 with a
strong sales pipeline alongside improved visibility (and value) of recurring
revenues. The Board is expecting to deliver against market expectations for
the year with the expectation that there will be increased project orders
placed in H2 2024 based on historical trends and a strong order book.
Given the continued momentum being seen by the Group, the Board is focused on
driving further organic growth complemented by inorganic growth, when
appropriate, as opportunities to enhance our technology are identified. We
continue to progress with investment in the development of our new solutions
to help support the industry in its transition to IP and I am confident PRIMA
will be the best product to support the inevitable full-scale adoption".
Notes
(1) Adjusted EBITDA (earnings before interest, tax, depreciation and
amortisation) a non-GAAP measure, is EBITDA before non-recurring items and
foreign exchange gains/losses.
For further information please contact:
+44 (0) 75 55 59 36 02
Peter Mayhead - CEO
Cavendish Capital Markets Limited (Nominated Adviser and Broker)
Marc Milmo / Teddy Whiley - Corporate Finance +44 (0) 207 220 0500
Tim Redfern / Sunila de Silva - ECM
The Company is quoted on the LSE AIM market (PEB.L). More information can be
found at www.pebbleplc.com (http://www.pebbleplc.com) .
About Pebble Beach Systems
Pebble Beach Systems (trading as Pebble) is a world leader in designing and
delivering automation, integrated channel and virtualised playout solutions,
with scalable products designed for applications of all sizes. Founded in
2000, Pebble has commissioned systems in more than 70 countries, with proven
installations ranging from single up to over 150 channels in operation, and
around 2000 channels currently on air under the control of our automation
technology. An innovative, agile company, Pebble is focused on discovering its
customers' requirements and pain points, designing solutions which will
address these elegantly and efficiently, and delivering and supporting these
professionally and in accordance with its users' needs.
Forward-looking statements
Certain statements in this announcement are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations
will prove to be correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. The Group undertakes no
obligation to update any forward-looking statements whether as a result of new
information, future events or otherwise. Nothing in this announcement should
be construed as a profit forecast.
CHAIRMAN'S STATEMENT
Introduction
In what has been a challenging market for orders, the Group is pleased to
report a 12% increase in overall orders received. Importantly this has been
driven by a 22% increase in our SLA orders following the price rise exercise
undertaken and an increase in multi year SLA orders. The increase in SLAs
continues to improve visibility of future revenue.
Despite the upturn in orders, revenue for H1 24 was 4% down on H1 last year.
This is a result of delays to project orders in H1 being pushed back to H2.
However, the Board is encouraged by the Group's visibility of these orders and
expects a strong second half and meeting its expectations for FY24.
The Group has managed its cost base to ensure the project order delays have
not adversely impacted the Group's Adjusted EBITDA margin and I am pleased to
report a H1 Adjusted EBITDA margin of 27% (H1 FY23: 25%). The forecasted
increase in H2 revenue gives the Board confidence that full year Adjusted
EBITDA margin will be at 31% in line with expectations.
The Board is pleased with the investment in the sales team to support new
opportunities and allow further market growth.
The Group has continued to pay down the long-term debt, and although net debt
(excluding IFRS 16 leases) of £4.8m is flat with the FY23 year end position,
the Board is pleased to see net debt is 6% down on last year's net debt
position (H1 23: £5.1m).
Financial performance
Revenue was 4% down on the comparative period totalling £5.3m (H1 23:
£5.5m). This is a result of project revenue being £0.8m less then H1 23 (H1
2023 £3.0m) on the back of the reduction in project orders. The project
order reduction has been mitigated by the SLA price rises resulting in a
higher recurring revenue of £3.1m (H1 2023: £2.5m).
Higher Adjusted EBITDA margins are achievable on recurring software revenues,
therefore with a focus on increasing the mix of recurring software revenues
and the usual cycle of higher project revenue in the second half of the year,
the Group remains on target for a strong H2. Recurring revenue is up 21% and
now accounts for 58% of revenue base (H1 23: 46%). This is encouraging for
future years' revenue.
Adjusted EBITDA(1) marginally increased to £1.40m (H1 23: £1.36m),
representing a 3% increase on H1 23 following the change in revenue mix
mentioned above, as well as careful control of costs. Adjusted EBITDA margin
is higher at 27% (H1 23: 25%), and we expect to maintain this as we continue
to focus on increasing the mix of recurring software revenue.
Cash conversion in H1 24 has remained strong with 101% of adjusted EBITDA
being converted to operating cash (H1 23: 145%). The reduced cash conversion
has been driven by the reduction in project orders delivered in the period,
which have a large upfront payment. SLA orders are often paid over the length
of the contract.
Net cash from operating activities (after interest paid) fell to £1.2m (H1
23: £1.7m); despite this the Group has continued its investment in R&D
and paying down the long-term debt.
A net debt position of £4.8m (excluding IFRS 16 leases) represents a 6%
reduction from the comparable period last year (H1 23: £5.1m). Despite the
lower cash generation, although still over 100% cash conversion, to the
comparable period last year the Group has continued to pay off the long-term
debt at the same rate as last year.
The Group invested £1.2m in R&D in the period (H1 23: £0.9m) as it
continues to develop software which can be sold on a recurring basis whilst
continuing to maintain and develop our existing product range.
A decrease in financing costs as a result of lower bank service charges and
slightly less interest as borrowing has reduced, has resulted in a net profit
of £0.29m (H1 23: £0.24m). The current interest rate on loan repayments is
9.10% (H1 23: 8.22%). This has resulted in an adjusted EPS of 0.3p (H1 23:
0.2p).
Operational performance
The year-on-year order increase saw H1 24 orders come in at £4.9m (H1 23:
£4.4m), driven by an increase in SLA orders as a result of the price rise
exercise. SLA orders of £2.7m are 22% up on last year's H1 intake (H1 23:
£2.2m).
We are still seeing delays in customers placing project orders, which is in
line with previous years, and is a symptom of the current global market
conditions. Project orders of £2.2m for H1 is flat on last year's project
order intake (H1 23: £2.2m). We entered the year with a lower project backlog
now that hardware lead times have been reduced. However, given the weighted
pipeline value for expected orders is 13% up on last year's value, the Group
expects to deliver a stronger H2 of project order intake.
Pebble Control has been integrated onto the PRIMA platform and has been
rebranded PRIMA Control. The solution now focuses on IP and stream management
for PRIMA applications and will no longer be available as a standalone
solution.
Ongoing software development
· PRIMA: Work continues on a cloud-native playout solution to
complement our current enterprise level automation offering.
· Media Processing Engine: Work is progressing on the software
solution for video playout capability with preliminary integration with Oceans
Automation achieved. The next milestones will include APIs, graphics
management and subtitling.
Cash flows and net debt
The Group held cash and cash equivalents of £0.2 million at 30 June 2024 (H1
23: £0.9 million). The table below summarises the cash flows for the half
year.
2024 2023
£'m £'m
Cash generated from operating activities 1.1 1.6
Net cash used in investing activities (1.2) (0.9)
Net cash used in financing activities (0.5) (0.5)
Net (decrease)/increase in cash and cash equivalents (0.6) 0.2
Cash and cash equivalents at 1 January 0.8 0.7
Cash and cash equivalents at 30 June 0.2 0.9
As at 30 June 2024 net debt (including IFRS 16 leases) was £4.9m (cash £0.2m
and bank debt of £5.1m and IFRS 16 leases of £0.1m). The Group was using all
£5.1m of its available facilities at 30 June 2024, having re-paid £0.5m in
the period.
Going concern
The directors are required to assess the Group's ability to continue to trade
as a going concern. The Board concluded, from its thorough assessment of the
detailed forecasts, that the Group will have sufficient resources to meet its
liabilities during the review period through to 31 December 2025 and that it
is appropriate that the Group prepare accounts on a going concern basis (see
note 3 below).
Principal risks and uncertainties
The principal risks and uncertainties facing the Group remain consistent with
the principal risks and uncertainties reported in the Group's 31 December 2023
Annual Report.
Current trading and outlook
The Group entered H2 2024 with a strong sales pipeline alongside improved
visibility (and value) of recurring revenues. The Board expects to deliver
against its targets for the year with the expectation that there will be
increased project orders placed in H2 2024 based on historical trends and a
strong order book.
The Board is pleased to see the SLA price rise exercise having a positive
effect on business performance and providing a stronger recurring revenue mix.
This will continue to give improved visibility of future revenue, which gives
confidence of future trading. This increased recurring revenue is supporting
our transition to an OPEX business.
The Board is pleased with the expansion of the sales team to help convert the
opportunities that we have in the pipeline into orders. This will also drive
an increase in the number of potential opportunities and increase new
business. The Board is focused on driving further Group organic growth and
will look to complement this by appropriate inorganic growth as opportunities
to enhance our technology offering are identified. Furthermore, we continue to
progress with investment in the development of our new solutions to help
support the industry.
John Varney
Non-Executive Chairman
CONSOLIDATED INCOME STATEMENT
for the half year ended 30 June 2024
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Revenue 4 5,256 5,468 12,370
Cost of sales (1,145) (1,417) (2,826)
Gross profit 4,111 4,051 9,544
Sales and marketing expenses (1,443) (1,289) (2,747)
Research and development expenses (776) (884) (1,739)
Administrative expenses (1,285) (1,304) (2,983)
Foreign exchange gains/(losses) (21) (35) (31)
Other expenses (37) - (105)
Operating profit 5 549 539 1,940
Operating profit is analysed as:
Adjusted EBITDA 1,400 1,358 3,773
Non-recurring items (37) - (105)
Share based payment expense -- (28) (57)
Exchange gains/(losses) credited/(charged) to the income statement (21) (35) (31)
Earnings before interest, tax, depreciation and amortisation (EBITDA) 1,342 1,295 3,580
Depreciation (82) (122) (200)
Amortisation of capitalised development costs (711) (634) (1,305)
Finance costs (255) (291) (531)
Profit before tax 294 248 1,544
Tax 6 (4) (6) (10)
Profit for the period being attributable to owners of the parent 290 242 1,534
Earnings per share
attributable to the owners of
the parent during the period
Basic earnings per share 7 0.2p 0.2p 1.2p
Diluted earnings per share
Diluted earnings per share 7 0.2p 0.2p 1.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the half year ended 30 June 2024
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit for the financial year 290 242 1,534
Other comprehensive income - items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of overseas operations - 3 9
Total profit for the period attributable to owners of the parent 290 245 1,543
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the half year ended 30 June 2024
Capital
Ordinary shares Share redemption Merger Translation Accumulated losses
£000 premium reserve reserve reserve £000 Total
£000 £000 £000 £000 £000
At 1 January 2024 3,115 6,800 617 29,778 (176) (39,281) 853
Share based payments: value of employee services - - - - - - -
Transactions with owners - - - - - - -
Retained profit for the period - - - - - 290 290
Exchange differences on translation of overseas operations - - - - - - -
Total comprehensive income/expense for the period - - - - - 290 290
At 30 June 2024 (Unaudited) 3,115 6,800 617 29,778 (176) (38,991) 1,143
At 1 January 2023 3,115 6,800 617 29,778 (185) (40,872) (747)
Share based payments: value of employee services - - - - - 28 28
Transactions with owners - - - - - 28 28
Retained profit for the period - - - - - 242 242
Exchange differences on translation of overseas operations - - - - 3 - 3
Total comprehensive income/expense for the period - - - - 3 242 245
At 30 June 2023 (Unaudited) 3,115 6,800 617 29,778 (182) (40,602) (474)
At 1 January 2023 3,115 6,800 617 29,778 (185) (40,872) (747)
Share based payments: value of employee services - - - - - 57 57
Transactions with owners - - - - - 57 57
Retained profit for the year - - - - - 1,534 1,534
Exchange differences on translation of overseas operations - - - - 9 - 9
Total comprehensive income/expense for the period - - - - 9 1,534 1,543
At 31 December 2023 (Audited) 3,115 6,800 617 29,778 (176) (39,281) 853
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2024
30 June 2024 30 June 2023 31 December
2023
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 8 7,561 6,615 7,107
Property, plant and equipment 364 496 435
Other non-current assets 12 12 12
7,937 7,123 7,554
Current assets
Inventories 371 491 303
Trade and other receivables 3,429 3,330 4,318
Current tax assets - - -
Cash and cash equivalents 246 951 796
4,046 4,772 5,417
Liabilities
Current liabilities
Financial liabilities - borrowings 1,000 1,000 1,000
Trade and other payables 5,669 6,039 6,169
Lease liabilities - current 51 63 47
6,720 7,102 7,216
Net current liabilities (2,674) (2,330) (1,799)
Non-current liabilities
Financial liabilities - borrowings 4,050 5,050 4,550
Lease liabilities - non-current 70 217 352
Deferred tax liabilities - - -
4,120 5,267 4,902
Net asset/(liabilities) 1,143 (474) 853
Equity attributable to owners of the parent
Ordinary shares 3,115 3,115 3,115
Share premium account 6,800 6,800 6,800
Capital redemption reserve 617 617 617
Merger reserve 29,778 29,778 29,778
Translation reserve (175) (182) (176)
Retained earnings (38,992) (40,602) (39,281)
Total equity 1,143 (474) 853
CONSOLIDATED STATEMENT OF CASH FLOWS
for the half year ended 30 June 2024
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 9 1,415 2,030 3,917
Interest paid (255) (291) (531)
Taxation paid - 2 (8)
Net cash from operating activities 1,160 1,741 3,378
Cash flows from investing activities
Interest received - - -
Purchase of property, plant and equipment (41) (23) (68)
Expenditure on capitalised development costs (1,165) (942) (2,105)
Net cash used in investing activities (1,206) (965) (2,173)
Cash flows from financing activities
Net cash used in repayment of financing activities (500) (500) (1,000)
Principal elements of lease payments (4) (56) (96)
Net cash used in financing activities (504) (556) (1,096)
Net (decrease)/increase in cash and cash equivalents (550) 220 109
Effect of foreign exchange rate changes - 3 (41)
Cash and cash equivalents and overdrafts at 1 January 796 728 728
Cash and cash equivalents and overdrafts at period end 246 951 796
Net debt (excluding IFRS 16 leases) comprises:
Cash and cash equivalents and overdrafts 246 951 796
Borrowings (5,050) (6,050) (5,550)
Net debt (excluding IFRS 16 leases) at period end (4,804) (5,099) (4,754)
NOTES TO THE HALF-YEAR REPORT
for the six months ended 30 June 2024
1. GENERAL INFORMATION
The Pebble Beach Systems Group is a leading global software business
specialising in playout, content management, and IP control solutions for the
broadcast and media technology markets.
The Company is a public limited company and is quoted on the Alternative
Investment Market (AIM) of the London Stock Exchange. The Company is
incorporated and domiciled in the UK, with registered number of 04082188.
The address of its registered office is Unit 1, First Quarter, Blenheim Road,
Epsom, Surrey, KT19 9QN.
This half-year results announcement was approved by the Board on 20 August
2024.
2. BASIS OF PREPARATION
The financial information for the period ended 30 June 2024 set out in this
half-year report does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2023 have been filed with the Registrar of
Companies. The auditor's report on those financial statements was unqualified.
The half-year financial information has been prepared using the same
accounting policies and estimation techniques as will be adopted in the Group
financial statements for the year ending 31 December 2024. The Group financial
statements for the year ended 31 December 2023 were prepared under UK-adopted
international accounting standards. These interim financial statements have
been prepared on a consistent basis and format. The Group has not applied IAS
34 'Interim Financial Reporting', which is not mandatory for AIM companies, in
the preparation of these interim financial statements.
3. GOING CONCERN
The directors are required to assess the Company's and the Group's ability to
continue to trade as a going concern.
To assess the appropriateness of preparing financial statements on a going
concern basis, management prepared detailed projections of the consolidated
statement of profit and loss, the statement of financial position and cash
flow statements through to 31 December 2025. This review period extends to
the end of the financial year for 2025, which is looking forward 16 months
beyond the date of approval of these financial statements. The projections
included testing against the minimum liquidity and cash flow cover covenants
required by the new term loan facility.
The projections used the forecast for 2024 and were updated for current
trading and forecasts. This analysis was then extended to the end of 2025. The
projections were stress tested in two ways. Project orders for 2024 were
reduced by 50%, then reduced by 40% with a 25% reduction in SLA renewals in
2024 applied. The existing support service contracts, where revenue is
recognised over time were assessed based on historic renewal rates, to
establish the likely renewal of this recurring revenue. Management reviewed
the resource levels and marketing spend required to support the reduced
revenue and reflected cost reductions in the forecast. Even with a 25% drop in
SLA renewals, management concluded the business will remain a going concern.
The Board has concluded from its thorough assessment of the detailed forecasts
and ability to enact any mitigating actions, if required, that the Group will
have sufficient resources to meet its liabilities during the review period
through to 31 December 2025, that it will meet the bank covenants and that it
is appropriate that the Group and the Company prepare accounts on a going
concern basis.
We enjoy a close relationship with our bank and have regular review meetings
with them. In March 2024, we signed a new term loan through to 30 October
2026, which re-financed the existing £5.5m million RCF at the same level of
commitment, with repayment levels consistent with previous years and
appropriate financial covenants. There have been no breaches in financial
covenants to date and no breaches are anticipated in the going concern period.
However, both of the financial covenants in relation to the minimum liquidity
and cash flow cover are sensitive to changes in the timing of project orders
being placed and SLA renewals continuing to slip during the price negotiation.
Management have concluded that that this timing delay is short term only and
cashflow levels are expected to increase in the next few months. The Board has
concluded, based on review, challenge and prior experience, that management
will be able to manage working capital movements appropriately such that
covenants will not be breached in the period assessed. Management also had to
manage working capital movements in quarter one 2024 to ensure there were no
breaches in covenants. Management has estimated the timing of cash receipts
and identified mitigating actions to be taken in the event of a breach
becoming likely. Management's ability to enact these mitigating actions and
their effectiveness are considered significant judgements.
The directors are confident that any loan extensions required post October
2026 would be granted given the historic track record.
4. SEGMENTAL REPORTING
The Group's internal organisational and management structure and its system of
internal financial reporting to the Board of Directors comprise of Pebble
Beach Systems Limited and Group. The chief operating decision-maker has been
identified as the Executive.
The Board reviews the Group's internal financial reporting in order to assess
performance and allocate resources. Management have therefore determined that
the operating segments for the Group will be based on these reports.
The Pebble Beach Systems Limited business is responsible for the sales and
marketing of all Group software products and services.
The table below shows the analysis of Group external revenue and operating
profit by business segment.
Pebble Beach Systems Group Total
£'000 £'000 £'000
6 months to 30 June 2024 (Unaudited)
Total revenue 5,256 - 5,256
Adjusted EBITDA 1,634 (234) 1,400
Depreciation (82) - (82)
Amortisation of capitalised development costs (711) - (711)
Non-recurring items (37) - (37)
Exchange gains (21) - (21)
Finance costs (5) (250) (255)
Finance income 149 (149) -
Profit/(loss) before taxation 927 (633) 294
Taxation (4) - (4)
Profit/(loss) for the period being attributable to owners of the parent 923 (633) 290
6 months to 30 June 2023 (Unaudited)
Total revenue 5,468 - 5,468
Adjusted EBITDA 1,555 (197) 1,358
Depreciation (122) - (122)
Amortisation of capitalised development costs (634) - (634)
Share based payment expense - (28) (28)
Non-recurring items - - -
Exchange gains (35) - (35)
Finance costs (5) (286) (291)
Finance income 131 (131) -
Profit/(loss) before taxation 890 (642) 248
Taxation (6) - (6)
Profit/(loss) for the period being attributable to owners of the parent 884 (642) 242
Year to 31 December 2023 (Audited)
Total revenue 12,370 - 12,370
Adjusted EBITDA 4,221 (448) 3,773
Depreciation (200) - (200)
Amortisation of capitalised development costs (1,305) - (1,305)
Share based payment expense - (57) (57)
Non-recurring items (105) - (105)
Exchange (losses)/gains (31) - (31)
Finance costs (10) (521) (531)
Intercompany finance income/(costs) 336 (336) -
Profit/(loss) before taxation 2,906 (1,362) 1,544
Taxation (10) - (10)
Profit/(loss) for the year being attributable to owners of the parent 2,896 (1,362) 1,534
Geographic external revenue analysis
The revenue analysis in the table below is based on the geographical location
of the customer of the business.
6 months to 30 June 6 months to 30 June Year ended 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
Total Total Total
£'000 £'000 £'000
By market
UK & Europe 2,921 3,362 6,381
North America 735 497 1,376
Latin America 304 350 1,092
Middle East 1,170 1,151 3,055
Asia / Pacific 126 108 466
5,256 5,468 12,370
Net assets/(liabilities)
The table below summarises the net liabilities of the Group by division.
Balance sheet reporting is disclosed by the divisional assets and liabilities
of the Group as this is consistent with the presentation of internal
information provided to the Executive Management Board and the Board of
Directors.
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
By division:
Pebble Beach Systems 6,485 5,938 6,804
Group (5,342) (6,412) (5,951)
1,143 (474) 853
5. OPERATING PROFIT
The following items have been included in arriving at the operating profit for
the business:
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Inventory recognised as an expense 451 610 1,359
Director and employee costs 3,675 3,244 7,029
Depreciation of property, plant and equipment 82 122 200
Non-recurring items 37 - 105
Exchange (gains)/losses (credited)/charged to profit and loss 21 35 31
Amortisation of capitalised development costs 711 634 1,305
6. INCOME TAX EXPENSE
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current tax
UK corporation tax - - -
Foreign Tax - current year 4 6 10
Total current tax 4 6 10
Deferred tax
UK corporation tax - - -
Total deferred tax - - -
Total taxation 4 6 10
7. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
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. The dilutive shares are those share options granted to employees where
the exercise price is less than the average market price of the Company's
ordinary shares during the year. The average market value of the Company's
shares for the purpose of calculating the dilutive effect of share options was
based on quoted market prices for the year during which the options were
outstanding.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
6 months to 30 June 2024 (Unaudited)
Weighted
average Earnings
number per share
Earnings of shares pence
£'000 '000s
Basic earnings per share
Profit attributable to ordinary shareholders 290 0.2p
Basic earnings per share 290 124,477 0.2p
Diluted earnings per share
Profit attributable to ordinary shareholders 290 0.2p
Diluted earnings per share 290 125,875 0.2p
6 months to 30 June 2023 (Unaudited)
Weighted
average Earnings
number per
Earnings of shares share
£'000 '000s pence
Basic earnings per share
Profit attributable to ordinary shareholders 242 0.2p
Basic earnings per share 242 124,477 0.2p
Diluted earnings per share
Profit attributable to ordinary shareholders 242 0.2p
Diluted earnings per share 242 125,114 0.2p
Year ended 31 December 2023 (Audited)
Weighted
average Earnings
number per share
Earnings of shares pence
£'000 '000s
Basic earnings per share
Profit attributable to ordinary shareholders 1,534 1.2p
Basic earnings per share 1,534 124,477 1.2p
Diluted earnings per share
Profit attributable to ordinary shareholders 1,534 1.2p
Diluted earnings per share 1,534 127,454 1.2p
Adjusted earnings
The directors believe that adjusted EBITDA, adjusted earnings and adjusted
earnings per share provide additional useful information on underlying trends
to shareholders. These measures are used by management for internal
performance analysis and incentive compensation arrangements. The term
"adjusted" is not a defined term used under IFRS and may not therefore be
comparable with similarly titled profit measurements reported by other
companies. The principal adjustments made are in respect of the amortisation
of acquired intangibles, share based payment expense, non-recurring items and
exchange gains or losses charged to the income statement and their related tax
effects.
The reconciliation between reported and underlying earnings and basic earnings
per share is shown below:
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
Total Total Total
(Unaudited) (Unaudited) (Audited)
Earnings Earnings Earnings
£'000 Pence £'000 Pence £'000 Pence
Reported earnings and earnings per share 290 0.2p 242 0.2p 1,534 1.2p
Share based payment expense - 0.0p 28 0.0p 57 0.1p
Exchange (gains)/losses 16 0.0p 27 0.0p 23 0.0p
Non-recurring items 37 0.1p - 0.0p 85 0.1p
Adjusted earnings and earnings per share 343 0.3p 297 0.2p 1,699 1.4p
8. INTANGIBLE ASSETS
Goodwill Acquired customer relationships Acquired intellectual property Capitalised development costs Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 (audited) 3,218 4,493 3,350 8,745 19,806
Additions (unaudited) - - - 941 941
At 30 June 2023 (unaudited) 3,218 4,493 3,350 9,686 20,747
At 1 January 2023 (audited) 3,218 4,493 3,350 8,745 19,806
Additions (audited) - - - 2,105 2,105
At 1 January 2024 (audited) 3,218 4,493 3,350 10,850 21,911
Additions (unaudited) - - - 1,165 1,165
At 30 June 2024 (unaudited) 3,218 4,493 3,350 12,015 23,076
Accumulated amortisation
At 1 January 2023 (audited) - 4,493 3,350 5,656 13,499
Charge for the period (unaudited) - - - 633 633
At 30 June 2023 (unaudited) - 4,493 3,350 6,289 14,132
At 1 January 2023 (audited) - 4,493 3,350 5,656 13,499
Charge for the year (audited) - - - 1,305 1,305
At 1 January 2024 (audited) - 4,493 3,350 6,961 14,804
Charge for the period (unaudited) - - - 711 711
At 30 June 2024 (unaudited) - 4,493 3,350 7,672 15,515
Net book value
At 30 June 2024 (unaudited) 3,218 - - 4,343 7,561
At 31 December 2023 (audited) 3,218 - - 3,889 7,107
At 30 June 2023 (unaudited) 3,218 - - 3,397 6,615
At 1 January 2023 (audited) 3,218 - - 3,089 6,307
The amortisation of development costs is included in research and development
expenses in the Consolidated Group Income Statement. Within capitalised
development costs there are £5.4 million (6 months to June 2023: £4.0
million) of fully written down assets that are still in use.
9. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of profit before taxation to net cash flows from operating
activities.
6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December
2023
Total Total Total
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit before tax 294 248 1,544
Depreciation of property, plant and equipment 82 122 200
(Profit)/loss on disposal of property, plant and equipment 26 - -
Amortisation and impairment of development costs 711 634 1,305
Loss on disposal of property, plant and equipment - - 20
Non-recurring item - - 105
Share based payment expense - 28 57
Finance costs 255 291 531
Decrease/(increase) in other non-current assets - - 26
Decrease/(increase) in inventories (68) 6 194
Decrease/(increase) in trade and other receivables 889 263 (792)
Increase/(decrease) in trade and other payables (774) 438 727
Net cash generated from operating activities 1,415 2,030 3,917
10. NET FUNDS
Reconciliation of change in cash and cash equivalents to movement in net debt:
Net cash and cash equivalents Other borrowings Total net debt
£'000 £'000 £'000
At 1 January 2024 796 (5,675) (4,879)
Cash flow for the period before financing (46) - (46)
Movement in borrowings in the period (500) 500 -
Principal lease payments (4) 4 -
Exchange rate adjustments - - -
Cash and cash equivalents at 30 June 2024 (Unaudited) 246 (5,171) (4,925)
At 1 January 2023 728 (6,485) (5,757)
Cash flow for the period before financing 720 - 720
Movement in borrowings in the period (500) 500 -
Exchange rate adjustments 3 - 3
Cash and cash equivalents at 30 June 2023 (Unaudited) 951 (6,050) (5,099)
At 1 January 2023 728 (6,706) (5,978)
Cash flow for the year before financing 1,205 - 1,205
Movement in borrowings in the year (1,000) 1,000 -
Principal lease payments (96) 96 -
Netting of arrangement fee - (65) (65)
Exchange rate adjustments (41) - (41)
Cash and cash equivalents at 31 December 2023 (Audited) 796 (5,675) (4,879)
Ends
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