REG - Quartix Technologies - Interim Results
29/07/2024 07:00
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RNS Number : 0986Y Quartix Technologies PLC 29 July 2024
29 July 2024
Quartix Technologies plc
("Quartix", "the Group" or "the Company")
Interim Results
Quartix Technologies plc (AIM:QTX), a leading supplier of subscription-based
vehicle tracking systems, analytical software and services, is pleased to
announce its unaudited results for the half year ended 30 June 2024.
Financial highlights:
· Group revenue increased by 10% to £16.1m (2023: £14.6m)
o Fleet revenue increased by 10% to £16.0m (2023: £14.5m)
o Fleet revenue represented 99.3% of total revenue (2022: 98.9%)
· Adjusted EBITDA(1) remained constant at £2.7m (2023: £2.7m)
· Operating profit increased by 13% to £2.7m (2023: £2.4m)
· Profit before tax increased by 13% to £2.7m (2023: £2.4m)
· Diluted earnings per share of 4.49p (2023: 4.16p)
· Free cash flow(2) decreased by 21% to £1.1m (2023: £1.4m)
· Interim dividend of 1.50p per share proposed (2023: 1.50p)
(1 ) Earnings before interest, tax, depreciation, amortization and share
based payment expense (see note 4)
(2 ) Cash flow from operations after tax and investing activities
Principal activities and performance measures
The Group's main strategic objective is to grow its subscription base
profitably and develop the associated annualised recurring revenue.
Annualised recurring revenue has increased by 11% year on year (see definition
in KPI table below). Annualised recurring revenue is a forward-looking key
performance measure, and it is pleasing that it grew by £3.04m on a constant
exchange rate to £30.94m at 30 June 2024, compared to 30 June 2023.
The Key Performance Indicators used by the Board to assess the performance of
the business are listed below and discussed in the Chairman's Statement.
Key Performance Indicators ("KPIs")
Period ended 30 June 2024 2023 % change
Fleet subscriptions1 (new units) 37,863 33,547 13
Fleet subscription base(2) (units) 282,922 251,787 12
Fleet customer base(3) 28,586 26,337 8
Fleet gross attrition (annualised)(4) (%) 14.0 13.5
Annualised recurring revenue(5) (£'000) 30,940 27,972 11
Fleet invoiced recurring revenue(6) (£'000) 15,080 13,788 9
Fleet revenue (£'000) 16,052 14,456 11
Change in ASP(7) (%) (1.3) (4.6)
( )
(1) New vehicle tracking units subscriptions added to the subscription base in
6 months to 30 June before any attrition
(2) The number of vehicle tracking units subscribed to the Group's fleet
tracking services, including units waiting to be installed for which
subscription payments have started or are committed
(3) The number of customers associated with the fleet subscription base
(4) The number of new vehicle tracking unit subscriptions, less the increase
in the subscription base, expressed as a percentage of the mean subscription
base between 30 June 2023 and 30 June 2024
(5) Annualised data services revenue for the subscription base at 30 June,
before deferred revenue, including revenue for units waiting to be installed
for which subscription payments have already started or are committed, with
comparative June 2023 measured at a constant exchange rate.
(6) Invoiced subscription charges before provision for deferred revenue
7 The change in average subscription price of the base expressed as a
percentage of the average subscription price at 30 June, with comparative June
2023 measured at a constant exchange rate.
Overheads on the face of the Consolidated Statement of Comprehensive Income
have been split between Sales & Marketing expenses and Administration
expenses, with Sales & Marketing expenses including the costs of customer
acquisition being the investment in marketing expenditure and payroll costs
for the sales teams.
Andrew Walters, Executive Chairman of Quartix, commented:
"The Company made very substantial progress in the first half of the year: new
subscriptions increased by 13% compared to 2023 and this led to record growth
in annualised recurring revenues ("ARR"), which increased by 11% to £30.9m
over the past year. Two thirds of this increase in ARR was achieved since
January 1st.
Remaining operating and liquidation costs associated with the Konetik
acquisition were all taken in the first half and other administrative and
operating costs have been controlled well during the period. The issues faced
by the Company in 2023 have now been put behind it, enabling it to refocus
strongly on its core business and to structure for further growth.
The Board is confident in the outlook for the remainder of the year and now
believes that both revenue and profit will moderately exceed market
expectations*. The Company looks forward to 2025 and the future with
confidence."
(*)Note: the Company believes that, prior to this announcement, market
expectations for 2024 performance in terms of revenue, adjusted EBITDA and
unadjusted free cashflow were £32.1m, £5.4m and £1.5m respectively.
For further information, please contact:
Quartix (www.quartix.com (http://www.quartix.com)
/en-gb)
01686 806 663
Andrew Walters, Executive Chairman
Cavendish (Nominated Adviser and Broker)
020 7200 0500
Matt Goode / Seamus Fricker (Corporate Finance)
Sunila de Silva (Corporate Broking)
The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.
Interim Financial Results Report
The Group's Interim Financial Statements for the 6 months ended 30 June 2024
are available in the "Investors" section of our website at:
www.quartix.com/en-gb/company/investors
About Quartix
Founded in 2001, Quartix is a leading supplier of subscription-based vehicle
tracking systems, software and services. The Group provides an integrated
tracking and telematics data analysis solution for fleets of commercial
vehicles and motor insurance providers which improves productivity and safety
and which lowers costs by capturing, analysing and reporting vehicle and
driver data.
Quartix is based in the UK and is listed on the AIM market of the London Stock
Exchange (AIM:QTX).
Chairman's Statement
Summary
Renewed focus on the Company's core business drives strong growth in recurring
revenues and operating profit.
The Company's Annualised Recurring Revenue ("ARR") increased by £3.04m (+11%)
in the 12 months from 1 July 2023 to 30 June 2024. Two thirds of this increase
(£2.04m) was achieved during the Period. ARR is the key forward-looking
measure of growth and financial performance for the Company.
Operating profit and profit before tax for the Period increased by 13% to
£2.7m (2023: £2.4m) despite the Company incurring significant operating
costs associated with the liquidation of Konetik Deutschland GmbH ("Konetik")
- as noted later in this section. Without the operating costs of Konetik
pre-tax profit would have been 30% ahead of last year.
Company revenue grew by 10% to £16.1m and the subscription base and new
subscriptions increased by 12% and 13% respectively.
Pricing, revenue retention and attrition.
Average revenue per unit subscription (average pricing) increased by 1% during
the Period, as inflationary price adjustment across the base offset the
effects of price erosion in some areas. The principal inflationary pressure
faced by the Company is that of wage growth in the service sector and it will
therefore review whether an index reflecting this factor would be a more
appropriate benchmark for future adjustments (particularly as the cost
benefits delivered by our systems for customers are also linked to this).
Net revenue retention* was 98.9% in the 6-month period to 30 June 2024 (2023:
96.5%). This result for 2024 would be 99.4% excluding the effects of the
fixed-term UK contract mentioned below.
Although attrition across the Company rose to 14% the rise was attributable
mainly to two factors: the termination of a very large UK contract, installed
in 2022, which had a fixed term of 2 years and which was not expected to
renew; and organisational issues in the USA which are discussed below. The
Board is not aware of any other large fixed-term contracts in the base and is
addressing the issues in the USA.
*Note - Net revenue retention is calculated by dividing the ARR of the
remaining customer base at the end of a period by the ARR value of that base
at the start of the period. It excludes the effects of new customer
acquisition during the period but includes the effects of upgrades and
additions to existing fleets and price changes.
Market performance
The key metrics shown below include growth expressed as a percentage since 1
July 2023, with the exception of the figures given for new subscriptions and
new customers, for which the growth shown is for the Period compared to the
same period in 2023.
Country ARR (£m) % Subscription Base (units) % Customer Base % New Subscriptions (units) % New Customers %
UK/EI 17.27 +6% 151,477 +7% 11,457 +0% 15,786 +17% 792 +6%
France 8.01 +20% 74,740 +22% 8,708 +14% 11,842 +0% 1,246 +4%
USA 3.14 -2% 28,843 -5% 3,752 -6% 3,144 -17% 352 -29%
Italy 1.14 +62% 12,240 +56% 1,925 +47% 3,181 +56% 482 +88%
Spain 0.79 +41% 9,650 +46% 1,825 +37% 2,217 +30% 422 +28%
Germany 0.56 +61% 5,468 +50% 828 +40% 1,603 +98% 221 +73%
Other 0.05 574 91 90 3
Total 30.94 +11% 282,992 +12% 28,586 +9% 37,863 +13% 3,518 +11%
UK
The UK was the principal beneficiary of renewed focus on the Company's core
business following the termination of the Evolve product line, and this led to
17% growth in new subscriptions and a 7% increase in the subscription base on
a trailing-12-months' ("TTM") basis. Notable successes were achieved in
medium-sized fleets where the Company's reputation for strong customer service
played a significant role. A return to growth in the customer base, albeit at
a modest level, was delivered in the period and strong emphasis on increasing
growth in customer acquisition rates is beginning to show positive results.
France
The subscription and customer bases grew by 22% and 14% respectively on a TTM
basis. Customer acquisition rates increased by 4% compared with the prior
period. New subscriptions were, however, flat on the same period last year but
14% ahead of the second half of 2023, and good progress is now being made
through all channels.
ARR in France increased by 20% in the 12 months to 30 June 2024.
USA
Performance in the USA has continued to be adversely affected by
organisational and marketing changes made during 2022 and 2023. As a
consequence, progress in ARR reduced growth from +$0.5m in 2021 to a deficit
of -$0.2m in 2023. Recruitment is progressing to support the US business,
return the subscription and customer bases to growth and to return attrition
rates to former levels. Enquiry levels are very encouraging and customer
acquisition rates are improving.
Italy, Spain and Germany
Strong growth was recorded on all key performance measures in each of these
countries. The combined ARR of these three territories grew by 54% to £2.49m.
New customer acquisition rates in Italy were particularly strong, as was
growth in new installations in Germany. All three countries offer substantial
opportunities for business development and further investment is planned for
the second half of 2024 and into 2025.
Product development, systems and overheads
4G upgrades in Europe
The cost of upgrading our subscription base in France was provided for in the
Company's accounts for 2023. £0.4m of the original provision (£3.8m) was
used in the Period and a further 41,000 units remain to be completed.
Our principal UK provider of mobile data services is currently reviewing the
size and usage of its 2G customer network before considering the transition to
4G. We believe that the UK 2G network is fundamentally different to that in
France in that it has been extensively used for a broad range of fixed and
mobile data services, particularly smart meters. Since the beginning of 2023
Quartix has only used SIM cards in its systems which have the capability of
using any available 2G network in the UK, as it is expected that 2G capacity
will be necessary for both smart meters and other remote monitoring
applications for at least the next five years.
Telematics developments
Quartix introduced a dashboard camera option in March which provides both
forward and driver-facing camera options. It is fully integrated with
Quartix's telematics system and tracking application and has gained good
traction with a number of medium-sized fleets in the UK.
Development of the next generation of telematics system is progressing well,
with significant enhancements to satellite positioning capabilities and
reduction in manufacturing cost. A further update on this will be provided in
the autumn.
Software and mobile applications
The Company's next generation of browser-based user application will be
launched to all users within the next month for the main tracking functions.
Development will continue over the next 18 months in migrating the whole
application to this new user interface.
A similar fundamental upgrade to the technology used in the Company's mobile
applications will commence by the end of the year. The project is in the
architectural design phase currently.
Systems and overhead effectiveness
Over the past 5 years the Company has integrated new accounting, CRM, business
and marketing systems with its core SQL databases. The hosting of these
databases has, in turn, been transitioned to managed services in the Cloud
(notably with Microsoft Azure). Whilst these system changes offer operational
and maintenance advantages, the costs have been higher than originally
expected and steps will now be taken to ensure that we optimise our use of
them.
We continue to adapt our organisational structure to focus on growth in our
core telematics business and have made some overhead cost reductions during
the Period, particularly in administrative functions.
Konetik
Quartix acquired Konetik in September 2023 for a consideration of up to
€3.9m. Konetik was a company specialising in consultancy services for fleets
making the transition to electric vehicles. It had substantial operating costs
but insignificant revenues and the growth anticipated at the time of
acquisition was not delivered in the initial period post-acquisition. As noted
in March, and having exhausted all other options including returning the
business to its former owners at nil cost, the Board decided to liquidate
Konetik and its Hungarian branch subsidiary.
The liquidation is well underway, with all employment agreements, save for
that for the administrative managing director, terminated and settled.
Termination notices to Konetik's two external customers were given in February
and its limited trading activities have ceased.
Operating costs of £0.28m for Konetik were recorded in the Period, and a
further provision of £0.15m has been included in the Interim results for
final costs. A further payment of approximately £0.2m will be due in
September under the terms of the acquisition agreement.
Financial Performance
Group revenue for the period increased by 10% to £16.1m (2023: £14.6m); the
Company's core fleet business represents more than 99% of revenues, 94% of
this revenue derives from recurring subscriptions. Operating profit and profit
before tax for the period increased by 13% to £2.7m (2023: £2.4m). Adjusted
EBITDA remained constant at £2.7m. The Company incurred approximately £0.6m
of operating costs associated with the liquidation of Konetik and other items
which are not expected to recur in the second half of the year. Cash flow from
operations after tax and investing activities or free cash flow, fell to
£1.1m.
Net cash decreased to £2.7m at 30 June 2024 (June 2023: £3.2m; 31 Dec 2023:
£2.4m), following the acquisition, operating and liquidation costs of
Konetik.
Basic earnings per share were 4.49p (2023: 4.21p). On a diluted basis earnings
per share were 4.37p (2023: 4.16p).
Dividend Policy and Recommended Interim Dividend
Subject to satisfactory performance and market conditions, the Board will
consider a final dividend for the year with the aggregate of the interim and
final dividend set at approximately 50% of cash flow from operating activities
less the cost of the 4G upgrade in France, this will be calculated after
taxation paid but before capital expenditure. The Board will also consider
distributing the excess of cash balances over £2m by way of supplementary
dividends. The surplus cash would be calculated by taking the year end cash
balance and deducting the proposed regular dividend. The policy will be
subject to review. The Board has recommended an interim dividend of 1.50p
(2023: 1.50p) per share, £0.7m in aggregate. The amount is in line with the
Group's stated policy on ordinary dividend payment. This was approved by the
Board on 26 July 2024. The interim dividend will be paid on 30 September 2024
to shareholders on the register on 30 August 2024. The ex-dividend date is
therefore 29 August 2024.
Governance and the Board
The Board is comprised of two Non-Executive Directors: Alison Seekings and Ian
Spence and myself as Executive Chairman. The appropriate executive management
structure of the Board for the future of the Company is currently under
review.
For further details regarding Corporate governance, please see the Company's
investor website (search: "Quartix investors").
Outlook
The Company has made very substantial progress in the first half of the year,
and the outlook for the remainder of the year is positive. Remaining costs
associated with the Konetik acquisition have been incurred or provided for in
these accounts and costs have been controlled well during the period. The
issues faced by the Company in 2023 have now been put behind it, enabling it
to structure for further growth. The Company will make targeted investments
for growth in each of its 6 geographic markets. This is expected to underpin
further significant financial progress in 2025 and beyond.
The Board is confident in the outlook for the remainder of the year and now
believes that both revenue and profit will moderately exceed market
expectations*. The Company looks forward to 2025 and the future with
confidence.
(*)Note: the Company believes that, prior to this announcement, market
expectations for 2024 performance in terms of revenue, adjusted EBITDA and
unadjusted free cashflow were £32.1m, £5.4m and £1.5m respectively.
Andrew Walters
Executive Chairman
Consolidated Statement of Comprehensive Income
30 June 30 June 31 December
2024 2023 2023
Unaudited Unaudited Audited
Notes £'000 £'000 £'000
Revenue 2 16,105 14,623 29,882
Cost of sales (4,959) (4,477) (12,904)
Gross profit 11,146 10,146 16,978
Sales & Marketing expenses (3,367) (3,182) (6,366)
Administrative expenses (5,065) (4,549) (9,285)
Impairment - - (2,695)
Fair value gain - - 312
Operating profit / (loss) 2,714 2,415 (1,056)
Finance income receivable 1 9 10
Finance costs payable (19) (15) (31)
Profit / (loss) for the period before taxation 2,696 2,409 (1,077)
Tax (expense) /credit (521) (373) 169
Profit /(loss) for the period 2,175 2,036 (908)
Other Comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange difference on translating foreign operations 104 3 43
Other comprehensive income for the year, net of tax 104 3 43
Total comprehensive income attributable to the equity shareholders of Quartix 2,279 2,039 (865)
Technologies plc
Adjusted EBITDA 3 2,732 2,689 5,397
Earnings per ordinary share (pence) 4
Basic 4.49 4.21 (1.88)
Diluted 4.37 4.16 (1.88)
Consolidated Statement of Financial Position
Company registration number: 06395159
30 June Restated 31 December 2023
2024 30 June
2023
Unaudited Unaudited Audited
Assets Notes £'000 £'000 £'000
Non-current assets
Goodwill 14,029 14,029 14,029
Property, plant and equipment 599 786 684
Deferred tax assets 1,146 236 1,144
Contract cost assets 1,099 927 894
Total non-current assets 16,873 15,978 16,751
Current assets
Inventories 1,802 1,585 1,411
Contract cost assets 4,784 4,259 4,550
Trade and other receivables 4,282 3,730 4,186
Cash and cash equivalents 2,671 3,249 2,380
Total current assets 13,539 12,823 12,527
Total assets 30,412 28,801 29,278
Current liabilities
Trade and other payables 4,383 3,509 3,955
Provisions 2,042 147 2,775
Contract liabilities 3,688 3,870 3,679
Current tax liabilities 354 629 557
10,467 8,155 10,966
Non-current liabilities
Lease liabilities 446 589 520
Non-current provisions 1,679 - 1,443
2,125 589 1,963
Total liabilities 12,592 8,744 12,929
Net assets 17,820 20,057 16,349
Equity
Called up share capital 6 484 484 484
Share premium account 6 6,332 6,332 6,332
Equity reserve 310 470 392
Capital redemption reserve 4,663 4,663 4,663
Translation reserve (191) (335) (295)
Retained earnings 6,222 8,443 4,773
Total equity attributable to equity shareholders of Quartix Technologies plc 17,820 20,057 16,349
Consolidated Statement of Changes in Equity
Share capital Share premium account Capital redemption reserve Equity reserve Translation reserve Retained earnings Total equity
£'000 £,000 £'000 £'000 £'000 £'000 £'000
Restated balance at 31 December 2022 484 6,332 4,663 342 (338) 9,428 20,911
Increase in equity reserve in relation to options issued - - - 156 - - 156
Adjustment for exercised options - - - (28) - 28 -
Dividends paid - - - - - (3,049) (3,049)
Transactions with owners - - - 128 - (3,021) (2,893)
Foreign currency translation differences - - - - 3 - 3
Profit for the period - - - - - 2,036 2,036
Total comprehensive income - - - - 3 2,036 2,039
Restated balance at 30 June 2023 484 6,332 4,663 470 (335) 8,443 20,057
Shares issued - - - - - - -
Increase in equity reserve in relation to options issued - - - (78) - - (78)
Dividend paid - - - - - (726) (726)
Transactions with owners - - - (78) - (726) (804)
Foreign currency translation differences - - - - 40 - 40
Loss for the period - - - - - (2,944) (2,944)
Total comprehensive income - - - - 40 (2,944) (2,904)
Balance at 31 December 2023 484 6,332 4,663 392 (295) 4,773 16,349
Adjustment for forfeited options - - - (82) - - (82)
Dividend paid - - - - - (726) (726)
Transactions with owners - - - (82) - (726) (808)
Foreign currency translation differences - - - - 104 - 104
Profit for the period - - - - - 2,175 2,175
Total comprehensive income - - - - 104 2,175 2,279
Balance at 30 June 2024 484 6,332 4,663 310 (191) 6,222 17,820
Consolidated Statement of Cash Flows
30 June 30 June 31 December 2023
2024 2023
Unaudited Unaudited Audited
Notes £'000 £'000 £'000
Cash generated from operations 5 1,837 2,090 4,465
Taxes paid (723) (711) (1,181)
Cash flow from operating activities 1,114 1,379 3,284
Investing activities
Additions to property, plant and equipment (21) (5) (17)
Interest received 1 8 10
Acquisition of subsidiary, net of cash acquired - - (1,986)
Cash flow from investing activities (20) 3 (1,993)
Cash flow from operating activities after investing activities (free cash 1,094 1,382 1,291
flow)
Financing activities
Repayment of lease liabilities (84) (82) (172)
Interest paid (5) - -
Dividend paid (726) (3,049) (3,775)
Cash flow from financing activities (815) (3,131) (3,947)
Net changes in cash and cash equivalents 279 (1,749) (2,656)
Cash and cash equivalents, beginning of period 2,380 5,062 5,063
Exchange differences on cash & cash equivalents 12 (64) (27)
Cash and cash equivalents, end of period 2,671 3,249 2,380
Notes to the Financial Statements (unaudited)
1 Significant accounting policies
Basis of preparation
The financial information has been prepared in accordance with recognition and
measurement principles of International accounting standards in conformity
with the requirements of the Companies Act 2006 ("IFRS (UK)") and in
accordance with those parts of the Companies Act 2006 that are relevant to
companies which report under IFRS (UK). The accounting policies adopted are
consistent with those of the financial statements for the year ended 31
December 2023, as described in those financial statements. In preparing these
interim financial statements, the Board has not sought to adopt IAS 34
"Interim financial reporting".
The figures for the six-month periods ended 30 June 2024 and 30 June 2023 have
not been audited. The comparatives for 30 June 2023 have been restated for the
amendment for IAS12: Income Taxes which required a deferred tax asset and
liability to be recognised for IFRS 16 leases, as reflected in the
consolidated financial statements of Quartix Technologies plc for the year
ended 31 December 2023.
The figures for the year ended 31 December 2023 have been extracted from, but
do not constitute, the consolidated financial statements of Quartix
Technologies plc for that year. The original financial statements for the year
ended 31 December 2023 have been delivered to the Registrar of Companies and
included an Auditors' Report, which was unqualified and did not contain a
statement under section 498(2) or section 498(3) of the Companies Act 2006.
Going concern
Global events continue to contribute to adverse economic pressures and
economic uncertainties. The Company is taking appropriate action to monitor,
address and mitigate the uncertainties and increased risks facing the Company
as a result and have taken these additional uncertainties into account in
assessing the going concern position.
The Board takes all reasonable steps to review and consider any factors that
may affect the ability of the Group to continue as a going concern. The
Group's forecasts and projections, taking account of reasonably possible
changes in trading performance, show that the Group is able to generate
sufficient liquidity. The Group enjoys a strong income stream from its
subscription base while current liabilities include a substantial provision
for deferred revenue which is a non-cash item.
After assessing the forecasts and liquidity of the business, for the next 18
months and the longer-term strategic plans, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. The Group therefore continues to adopt
the going concern basis in preparing consolidated financial statements.
Contract Cost Assets
The Group incurs costs to fulfil its customer contracts, which include
commission costs, equipment costs, installation costs and carriage costs
amongst other costs. Costs to fulfil a customer contract are divided into:
· costs that give rise to an asset; and
· costs that are expensed as incurred.
When determining the appropriate accounting treatment for such costs, the
Group firstly considers any other applicable standards. If those standards
preclude capitalisation of a particular costs, then an asset is not recognised
under IFRS 15.
If other standards are not applicable to costs to fulfil a customer contract,
the Group applies the following criteria which, if met, result in
capitalisation of costs that:
· directly relate to a contract;
· generate or enhance resources that will be used in satisfying (or in
continuing to satisfy)
performance obligations in the future; and
· are expected to be recovered
The Group has determined that, where the relevant criteria are met, that the
commission costs, equipment costs, installation costs and carriage costs are
likely to qualify to be capitalised as costs to fulfil a customer contract.
The Contract Cost Assets are amortised over the expected contract period on a
systematic basis that reflects the revenue stream generated by them, and this
cost is included in cost of sales. The expected contract term has been
calculated as an average of the population of new orders in the year, and this
calculation will be reviewed annually.
At each reporting date, the Group determines whether or not the Contract Cost
Assets are impaired by comparing the carrying amount of the asset with the
remaining amount of consideration that the Group expects to receive less the
costs that relate to providing services under the relevant contract.
2 Revenue
Revenues from external customers in the Group's major markets have been
identified based on the customer's geographical location and are disclosed
below.
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Geographical analysis by destination
United Kingdom 9,497 9,136 17,997
France 3,891 3,269 6,882
Other European territories 1,092 527 1,674
United States of America 1,625 1,691 3,329
16,105 14,623 29,882
3 Adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA)
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Operating profit/(loss) 2,714 2,415 (1,056)
Depreciation on property, plant and equipment, owned 24 41 76
Depreciation on property, plant and equipment, right of use 76 77 157
EBITDA 2,814 2,533 (823)
Share-based payment expense (incl. cash settled) (82) 156 78
Impairment of intangible asset: goodwill - - 2,464
Impairment of intangible asset: software - - 231
Fair value gain on re-estimate of future earn-out payments - - (312)
Provision for replacement of 2G units in France - - 3,759
Adjusted EBITDA 2,732 2,689 5,397
4 Earnings per share
The calculation of the basic earnings per share is based on the profits
attributable to the shareholders of Quartix Technologies plc divided by the
weighted average number of shares in issue during the period. The earnings per
share calculation relates to continuing operations of the Group.
Profits attributable to shareholders Weighted average number of shares Basic profit per share amount Fully diluted Diluted profit per share amount
weighted average number of shares
£'000 in pence in pence
Earnings per ordinary share
Period ended 30 June 2024 2,175 48,382,178 4.49 49,726,850 4.37
Period ended 30 June 2023 2,036 48,382,178 4.21 49,025,795 4.16
Year ended 31 December 2023 (908) 48,392,178 (1.88) 49,088,054 (1.88)
Adjusted earnings per ordinary share
Year ended 31 December 2023 4,294 48,392,178 8.87 49,088,054 8.75
For diluted earnings per share, the weighted average number of ordinary shares
is adjusted to assume the conversion of all dilutive potential ordinary
shares. Dilutive potential ordinary shares are those share options where the
exercise price is less than the average market price of the Company's ordinary
shares during the period.
To illustrate the underlying earnings for the year, the table above includes
adjusted earnings per ordinary share, which for 31 December 2023 excludes the
£3.8m re-estimate of the France 2G replacement unit provision recognised in
the year with its associated tax impact and the impairment on the goodwill and
other intangibles recognised on acquisition on Konetik of £2.7m offset by the
fair value gain on the re-estimate of the future earn-out payments due under
the share purchase agreement for the purchase of Konetik.
5 Note to the cash flow statement
Cash flow adjustments and changes in working capital:
30 June 2024 30 June 2023 31 December
2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Profit / (loss) before tax 2,696 2,409 (1,077)
Foreign exchange 73 78 25
Depreciation 100 118 233
Interest income (1) (8) (10)
Lease interest expense 19 15 31
Share based payment expense (82) 156 78
Impairment - - 2,695
Operating cash flow before movement in working capital 2,805 2,768 1,975
(Increase)/ decrease in trade and other receivables (124) (268) (599)
(Increase)/ decrease in contract cost assets (439) (899) (1,157)
(Increase) / decrease in inventories (391) 405 579
(Decrease) / increase in trade and other payables (22) (312) 3,504
Increase in contract liabilities 8 396 163
Cash generated from operations 1,837 2,090 4,465
6 Equity
Allotted, called up and fully paid Number of ordinary shares of £0.01 each Share capital £'000 Share premium £'000
At 1 January 2023 48,392,178 484 6,332
Shares issued - - -
At 30 June 2023 48,392,178 484 6,332
Shares issued - - -
At 31 December 2023 48,392,178 484 6,332
Shares issued - - -
At 30 June 2024 48,392,178 484 6,332
There were no shares issued in the period to 30 June 2024.
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