MAISTRO PLC 30 September 2015
blur Group plc
('blur Group', 'blur', the 'Group' or the 'Company')
Unaudited Interim Results
blur Group, the world's leading enterprise services platform and marketplace, is pleased to present its unaudited interim results for 6 months ended 30 June 2015, a period of strategic and operational progress which has seen the transition to an Enterprise-focussed model producing higher quality revenue streams and subsequent conclusion of the Financial Reporting Council enquiry.
Unaudited Unaudited (restated)
H1 2015 on H1
2014 Growth
Revenue 1,055 1,184 2,590 -10.9%
Listing feerevenue Total revenues | 1,674 | 1,846 | 4,715 | -9.3% |
Gross profit | 349 | 401 | 1,645 | -12.9% |
EBITDA* | (4,165) | (5,462) | (9,786) | +23.7% |
Loss before tax | (4,738) | (6,308) | (11,030) | +24.9% |
Cash balance | 12,401 | 24,432 | 17,401 | -49.2% |
619 662 2,125 -6.5%
*before provision for share based payments
Transition to Enterprise-focussed model producing higher quality revenue streams;;
24% improvement in EBITDA loss driven by 5.8% reduction in underlying administrative expenses (excl. bad debts and exchange gains/losses) vs. H1 2014. Continued focus on operational leverage in H2 2015;;
As of January 2015, blur no longer admitted contingent projects to the Marketplace.
H1 saw blur increasingly charge smaller business users in advance of admission to the Marketplace - revenue has fallen by 9.3% as a result of this increased vetting and as blur transitions to more mature Enterprise customers;;
92% increase in the average value of Completed Enterprise projects, 75% increase in the total value of Completed Enterprise Projects vs. H2 2014. These are both indicators of blur's shift to the Enterprise;;
Home Retail Group, Unilever and University of Greenwich among new Enterprise** customers;; Number of projects from all repeat customers at project Kick off increased by 34% against H2 2014;;
New Technology Platform, blur 5.0, launched, increasing automation and leverage;;
Premium, high margin Services introduced - blur Manage Ultra, blur Advanced Protect, blur Express, blur Engage and blur Data. Revenue generating in H2 2015;; and
Enterprise Buyer and Service Provider Subscription Plans pre-launched in June 2015. Revenue generating in H2 2015. blur's Enterprise Solution Set launched in Q2.
**blur defines the Enterprise as a business with 50 or more employees
Philip Letts, Chief Executive Officer, commented:'While H1 2015 has been a challenging six months, it is also one in which significant obstacles have been overcome and material progress made.
'Our new revenue recognition policy is now fully in effect and I'm pleased to announce that the release of this report coincides with the conclusion of the Financial Reporting Council's enquiries into blur's annual report and accounts for the year ended 31 December 2013.
'We understand the amendments to our revenue recognition process have been painful for all our stakeholders, but now believe we have a robust, scalable policy in place that appropriately reflects our position as Principal (under accounting guidelines), with respect to our existing customers, and the progress of a project through our platform.
'At the same time we launched blur 5.0, which is a considerable upgrade to our platform and sets us on a firm path to establish blur as a leader in Services-based Enterprise Resource Planning systems.
'While our transition from a SME-focussed platform to an Enterprise-focussed solution provider has undoubtedly contributed to what we believe will be a temporary pause in blur's growth, our newly introduced Enterprise Solution set is resonating strongly in our buyer community, directly addressing today's key priorities seen by our customers.
'Most importantly, we are seeing Enterprise customers becoming repeat customers, with increasingly more strategic projects, which are completing successfully at a higher average value than we've seen before. With blur's platform and Service Provider community maturing, we can now concentrate on acquiring loyal accounts, as opposed to pursuing business on a project-by-project basis.
'As well as providing our Enterprise clients and prospects access to a large and diverse supplier base we are now able to offer those customers both a full Solution set as well as Premium Services suited to their specific needs.
'Whilst implementing these changes to blur's operating model focus has continued on reducing costs and improving our operational leverage resulting in a 5.8% reduction in underlying operating expenses compared to H1 2014. The Board anticipates the business continuing its take up of Enterprise customers whilst maintaining strict control of costs.
To help in this process we have announced the appointment to blur's board of Roger de Peyrecave, as Non-Executive director and Head of Audit Committee, Rob Wirszycz, as Non-Executive Director, and today David Sherriff as Non-Executive Chairman. These appointments strengthen blur's governance and bring a wealth of invaluable experience to the blur team. I welcome them to the board and look forward to working together to help realise the full potential of the Group.'
For further information, please contact:blur Group plc investors@blurgroup.com
Tim Allen, CFO Tel: +44 (0) 1392 927189
N+1 Singer
Shaun Dobson/Jen Boorer Tel: +44 (0) 20 7496 3000
Yellow Jersey PR
Dominic Barretto/Alistair de Kare-Silver Tel: +44 (0) 7768 537 739
About blur Group plc at blurgroup.comblur Group operates the world's leading Enterprise Services Platform and Marketplace. To date over 65,000 businesses have adopted blur to buy or sell services online, including companies like, Tesco, GE, Danone, Daily Mail Group, Argos and PwC.
blur Group is a public company listed on the London Stock Exchange's AIM market (BLUR) and is headquartered in the UK with regional sales offices in the US and Europe.
Business Review
blur's business modelblur has a simple business model. The customer 'submits' their project online and, if they are a new customer, opens an account setting out details to start a contractual relationship with blur.
Following a process of honing the brief, collaborating with the customer on blur's Marketplace using our online 'Project Space', the customer is then invoiced for an access fee of 10% of the budgeted project value unless they are subscribed to one of blur's Buyer plans. Once the access fee is paid, or subscription validated, the project is 'listed' on blur's platform. This access fee is an upfront payment, as opposed to listing fees which historically have been raised on cancellation of a project. Access fees are included as part of Project revenue.
Upon listing, the brief is broadcasted to blur's Service Provider Community, who can pitch for the project ('Pitching on'), confident in the knowledge that the project is both real and live. blur manages this pitch process online and presents back to the customer a shortlist of the top pitches that best fit the brief. The customer chooses the best pitch for them and following final agreement on a 'Statement of Work', the project begins.
blur then provides project management, working with both the customer and Service Provider, to ensure that the project is delivered on-time and to the brief. blur provides an online tool called Project Space where blur, the customer and the Service Provider collaborate on the project objectives.
The customer is invoiced as the project progresses, in line with the agreed Statement of Work. In turn, blur makes payments to the assigned Service Provider in accordance with our agreed contract, until successful project completion.
How blur engages customersblur's customer engagement strategy is about acquiring and retaining customers, ensuring we exceed their expectations and experience success with every transaction, so they become brand advocates for the blur Marketplace.
Following blur's transition to becoming an Enterprise-focussed organisation, the Group now concentrates on engaging customers at an account level rather than pursuing individual projects. This means blur can generate higher quality, repeating business whilst reducing the costs of acquiring new projects.
blur particularly focusses conversations with its customers around one or more of the 5 Enterprise Solutions it offers;; Tail Spend Management, Supplier Diversity, Size Zero Enterprise, Ecosystem Management and The Digital Enterprise.
If a customer's problem is solved by blur simply, quickly and easily - a successful experience - the customer, with the larger Enterprise specifically targeted, will have clear business logic to use the Marketplace again.
During H1 2015 significant progress was made on a number of fronts:
Enterprise customersIn H1 2015, blur continued to focus its efforts on acquiring Enterprise customers. Emphasis has shifted from acquiring individual projects, to developing more mature accounts with a higher propensity for repeat business.
By focussing on the five solutions developed and launched in H1 2015, blur is addressing core business issues with its target customer base.
As a result, blur attracted several new Enterprise customers including Home Retail Group, Unilever and University of Greenwich. We also saw continuation of repeat business from existing Enterprise customers.
Also, as part of this shift, blur no longer admits purely contingent projects to the Marketplace. In addition blur increasingly charges smaller business users in advance of admission to the Marketplace.
With these key changes, blur saw increases in the value of Enterprise projects completing in H1 2015.
New Technology Platform, blur 5.0, launched, increasing automation and leverageDuring the period, we launched blur 5.0, the next phase of evolution for our platform.
blur 5.0 enables greater automation of the pitch selection process shaving weeks off the time taken by businesses to find a solution that fits their exact requirements.
The release of blur 5.0 removes the need to filter through dozens of tender documents to shortlist the best supplier pitches. Instead, the shortlist is generated by the machine intelligence capabilities of blur Sense™ which uses a set of proprietary algorithms to automatically match suppliers and their pitches with the requirements of the brief.
As well as shortening the pitch process for clients, the new technology allows blur to scale more rapidly with fewer internal staff hours consumed shortlisting pitches. The new release also brought improved notification and messaging services, allowing customers and service providers to communicate better within the platform.
We also implemented on-platform messaging enabling both buyers and sellers to freely communicate with blur about their project without the need to use separate e-mail or instant messaging tools.
Premium, high margin Services introducedblur launched a range of Premium Services in June 2015, specifically aimed at our Enterprise customer base:
blur Manage Ultra - the assignment of a dedicated project manager improves the customer experience and provides the single point of contact our Enterprise customers appreciate.
blur Protect Advanced - provides greater control and flexibility to the customer, specifically with respect to change requests and budgets
blur Express - significantly shortens the process to engage a Service Provider if a project is on a tight deadline
blur Engage - customers can engage with the blur team to provide bespoke procurement support over and above blur's standard support package
The Group also launched blur Data, a unique Subscription-based data tool that combines blur's experience of service provision with 3rd party data and analytics allowing our customers to:
Predict project costings and duration
Gain insights into services market trends
Monitor Business Services stock indices
Finally, we pre-launched, to our existing Buyer and Service Provider base, Enterprise Buyer and Service Provider Subscription Plans. Our new Premium Services, the blur Data product and new subscription plans have all started to generate additional revenue in H2 2015.
Switch of emphasis to Solutionsblur has been working on its Enterprise strategy for 12 months. During that time, we have met with and listened to many senior leaders of Enterprises spanning various geographies and sectors. By listening to their concerns, we have devised five solutions, tailored to address key business issues today:
Tail Spend Management - Get control of your unstructured purchasing to create better value within your delivery system
Supplier Diversity - Ensure fair and equal opportunities throughout your supply chain
Size Zero Enterprise - Doing more with less
Ecosystem Management - Shift your established organizational focus from 'company vs supply chain' to a blurred ecosystem where you 'manage from the middle'
Creating a Digital Enterprise - Digitally-driven business processes are now a mandatory success factor for any large enterprise
As we take these five solutions to our customers, we're finding that the solutions we've identified resonate across all of our Enterprise customer base and beyond into the wider business community.
Financial ReviewAs we transition to an Enterprise-based model, blur is applying stricter quality criteria to the projects and customers admitted to our Marketplace.
Two specific actions have been taken in H1 2015. As of January 2015, blur no longer admitted contingent projects to the Marketplace. H1 2015 also saw blur increasingly charge smaller business users in advance of admission to the Marketplace
This is particularly reflected in the decline in revenue reported under the Rest of World segment (down 24%). Historically, the projects originating from that region have had lower rates of completion and have led to complications with respect to cash collection.
The stricter criteria blur now applies, both to the credit worthiness and quality of project submission means that while revenue in the period showed a decline, we expect our cash collection metrics to improve.
This is also borne out by a reduction in listing fee revenue, indicating a reducing volume of cancelled projects.
In return, blur has prioritised its sales efforts in the US and UK markets. UK revenue has subsequently grown by 8% over H1 2014. The US has declined by 8% but we expect that trend to reverse in the second half as Enterprise traction improves in that geography.
We are seeing improvements in both the average value of Enterprise projects that completed (92%) and the total value of those Enterprises completing projects (75%). This gives us encouragement as we progress through H2 2015.
As a result of the stricter controls, the move to Enterprise and improved due diligence on the customers and projects admitted to the Marketplace H1 2015 revenues have reduced by 9.3% compared to H1 2014, this is seen as a temporary pause in growth whilst the transition to better quality and revenue and customers is underway
As reported in the 2014 annual report, following the appointment of KPMG as new auditors to the Group on 6 November 2014, and the enquiries made by the Financial Reporting Council into the annual report and accounts for the year ended 31 December 2013, blur amended its revenue recognition accounting policy resulting in a restatement of 2013 and H1 2014 comparatives, representing correction of an error.
As a result of the updated Revenue Recognition policy and changes to recognition of revenue as set out in the full 2014 accounts, H1 2014 revenue and associated costs have been corrected to reflect the revised treatment. The impact on H1 2014 has been to reduce recognised revenue from $5.7m to $1.8m and EBITDA loss has been increased from $4.0M to $6.1M. The changes to our policies and processes have now been fully implemented into the Group's working practices and the results will be reflected in both this and upcoming announcements.
The H1 2015 figures of $0.3m represents 20.9% of blur's revenue.
A further correction of accounting practice on H1 2014 comparatives is the allocation of the cost of blur staff in its Global Customer Success and Projects and Delivery functions to Cost of Sales. This change reduces gross margin while also reducing Administrative expenses. Therefore this adjustment is neutral from the perspective of EBITDA.
The H1 2015 gross margin of 20.9% is calculated on a consistent basis with H1 2014's restated gross margin of 21.7%.
Gross margin slightly reduced due to the leverage on staff costs included in cost of sales.
Operational expensesUnderlying operational costs (excluding exchange gains/losses and bad debts) reduced by 5.8% vs. H1 2014 and further reductions are expected in H2 2015.
Including exchange gains and losses and bad debt charges, H1 2015 Administrative expenses, following the reclassification of certain staff costs to costs of sales, are down 20.6% on H1 2014. We remain focussed on ensuring our expenses are aligned with the company's overall strategy and are appropriately sized.
The Loss from Operations is $5.0m. It represents a reduction of loss of 21.2% over H1 2014. The EBITDA loss similarly reduced by 23.7% compared to H1 2014. As well as a reduction of 5.8% in underlying operational expenses (excl. bad debts and exchange gains/losses) vs. H1 2014, blur also recognised an exchange gain on cash deposits in the period.
Finance income represents interest received on cash deposits. The H1 2014 total of $277,214 is higher than the 2014 total of $93,459 due to the interest on the deposit of cash received from fundraising in June 2014.
During the period we continue to invest in our in our trading platform, and the increase of $848,913 in the trading platform intangible asset represents payments made to staff dedicated to the development of the trading platform and capitalised
Cash used in operations totalled $4,349,694 in the period, down 21.9% from H1 2014. Cash as at 30 June 2015 totalled $12.4m.
blur has always recognised that building a new business requires the right people and we continue to evolve our teams. Our new Chief Financial Officer, Tim Allen, joined us on 20 July 2015 from Cambium Networks. We have also recently announced two new additions and one change to blur's board of directors.
Roger de Peyrecave joined us on 2 September 2015 as a Non-Executive Director and Chair of the Audit Committee. Roger is currently a partner at PricewaterhouseCoopers LLP ('PwC'), where he qualified as a Chartered Accountant in 1983, and has held senior management positions within PwC UK, including office and regional leader. He is also a director of PwC's internal company running a service delivery centre in Poland. Roger has over 20 years' experience as a PwC Partner and auditor to FTSE100 and midcap Plcs.
Rob Wirsczyz joined blur's board on 15 September 2015 as a Non-Executive Director. Rob works as a Non-Executive Chairman, adviser and mentor for a range of quoted and private businesses including Innovation Group plc and iForce plc. He has extensive domain expertise in enterprise outsourcing, managed services, software products, and consumer electronics. Rob applies this experience and knowledge to the companies he works with, in the areas of strategy, sales, marketing and people development.
On 30 September 2015, we announced that Mr. David Sherriff has been appointed to the position of Non- Executive Chairman to the blur Group board with immediate effect.
Conclusion & OutlookH1 2015 was a period of strategic and operational progress resulting in our EBITDA loss being reduced by 23.7% compared to H1 2014.
We made senior board appointments that reflect our ambition in the Enterprise space. We remain dedicated to that Enterprise-focussed strategy. We have released a suite of Solutions, Services and Products specifically targeted at the Enterprise customer. We have invested in our Enterprise sales team and our Marketing spend is now focussed on this target customer base. We have on boarded a number of new Enterprise customers and the number of repeat projects being processed through our platform is increasing.
In Q3 we have seen a positive reception for our five solutions. Through this approach blur has been able to significantly progress its engagement with increasingly significant Enterprises, including multi-national corporations.
This engagement has fed an increasing Enterprise sales pipeline in which we expect to see increasing conversion in Q4.
blur has made progress on its operating model, improving processes, controls and platform automation, which is leading to further progress on cost control and cash burn rates, particularly in Q4.
Consolidated statement of total comprehensive income blur Group plc30 June
30 June
2015
2014 31 Dec 2014
Unaudited Unaudited Audited RestatedUS$ | US$ | US$ | |
Revenue | 1,674,392 | 1,846,638 | 4,715,208 |
Cost of sales | (1,324,983) | (1,445,418) | (3,069,604) |
Gross profit | 349,409 | 401,220 | 1,645,604 |
Administrative expenses | (5,328,995) | (6,717,798) | (12,624,953) |
Loss from operations | (4,979,586) | (6,316,578) | (10,979,349) |
Finance income | 240,628 | 8,409 | 93,459 |
Finance expense | - | (39) | (143,660) |
Loss before tax | (4,738,958) | (6,308,208) | (11,029,550) |
Tax credit | 277,214 | 166,735 | 530,487 |
Loss for the period | attributable to equity |
holders of the parent company (4,461,744) (6,141,473) (10,499,063)
Exchange gains/(losses) arising on the
translation of foreign subsidiaries 67,684 533,756(1,544,473)
equity holders of the parent company (4,394,060) (5,607,717) (12,043,536)
The results reflected above relate to continuing activities.
The notes on pages 11 to 25 form part of these financial statements
(0.09) (0.20) (0.27)
Consolidated statement of financial position blur Group plcUS$ US$ US$
Property, plant and equipment 98,207 187,347 129,364
Intangible assets 2,678,711 1,720,350 2,269,284
Cash and cash equivalents 12,401,467 24,431,795 17,401,774
Trade and other receivables 2,935,213 2,840,210 1,740,885
Tax Receivable 855,722 454,122 766,631
Trade and other payables
(including derivatives) Social security and other taxes | 187,753 | 181,764 | 75,198 |
Loans and borrowings | 15,719 | 16,207 | 15,632 |
Total current liabilities | 2,765,227 | 2,825,689 | 2,036,876 |
2,561,755 2,627,718 1,946,046
Share capital | 769,179 | 769,179 | 769,179 |
Share premium | 37,425,856 | 37,439,322 | 37,425,856 |
Equity conversion reserve | 8,967 | 8,967 | 8,967 |
Merger reserve | 1,712,666 | 1,712,666 | 1,712,666 |
Share-based payment reserve | 1,401,137 | 1,161,834 | 1,074,046 |
Foreign exchange reserve | (1,162,622) | 847,923 | (1,230,306) |
Accumulated losses | (23,951,090) | (15,131,756) | (19,489,346) |
Total equity | 16,204,093 | 26,808,135 | 20,271,062 |
The notes on pages 11 to 25 form part of these financial statements
Consolidated statement of changes in equity blur Group plcCalled up share capital | Share premium | Equity conversion reserve | Foreign currency reserve | Merger reserve | Share- based payment reserve | Retained losses | Total | |
US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |
As at 1 January 2015 | 769,179 | 37,425,856 | 8,967 | (1,230,306) | 1,712,666 | 1,074,046 | (19,489,346) | 20,271,062 |
Loss for the period | - | - | - | - | - | - | (4,461,744) | (4,461,744) |
Other comprehensive income | - | - | - | 67,684 | - | - | - | 67,684 |
Total comprehensive Income | - | - | - | 67,684 | - | - | (4,461,744) | (4,394,060) |
Issue of ordinary shares | - | - | - | - | - | - | - | 0 |
Issue costs recognized in equity | - | - | - | - | - | - | - | 0 |
Share-based payments reserve | - | - | - | - | - | 327,091 | - | 327,091 |
As at 30 June 2015 (Unaudited) | 769,179 | 37,425,856 | 8,967 | (1,162,622) | 1,712,666 | 1,401,137 | (23,951,090) | 16,204,093 |
As at 1 January 2014 | 475,845 | 16,765,333 | 8,967 | 314,167 | 1,712,666 | 609,935 | (8,990,283) | 10,896,630 |
Loss for the period | - | - | - | - | - | - | (6,141,473) | (6,141,473) |
Other comprehensive income | - | - | - | 533,756 | - | - | - | 533,756 |
Total comprehensive Income | - | - | - | 533,756 | - | - | (6,141,473) | (5,607,717) |
Issue of ordinary shares | 293,334 | 21,706,681 | - | - | - | - | - | 22,000,015 |
Issue costs recognized in equity | - | (1,032,692) | - | - | - | - | - | (1,032,692) |
Share-based payments reserve | - | - | - | - | - | 551,899 | - | 551,899 |
As at 30 June 2014 (Unaudited) (Restated) | 769,179 | 37,439,322 | 8,967 | 847,923 | 1,712,666 | 1,161,834 | (15,131,756) | 26,808,135 |
30 June
2015
Six monthsended Year ended
30 June
2014 31 Dec 2014
US$ US$ US$
Loss after taxation (4,461,744) (6,141,473) (10,499,063)
Interest income - (net) (155,204) (8,371) 50,201
Amortization of intangible assets Cash outflows from operating activities before changes in working capital | 447,254 (4,080,697) | 210,405 (5,299,810) | 561,722 (9,960,311) |
(Increase)/Decrease in trade and other receivables | (978,774) | 851,553 | 1,866,378 |
Increase/(Decrease) in trade and other payables | 709,777 | (1,124,467) | (1,637,635) |
Cash used in operations | (4,349,694) | (5,572,724) | (9,731,568) |
Interest received | 155,204 | 8,911 | 94,252 |
Interest paid | - | (39) | (7,642) |
Income tax received/ (paid) | - | (125) | (10,846) |
Net Cash absorbed by operations | (4,194,490) | (5,563,977) | (9,655,804) |
Investing activities | |||
Purchase of property, plant and equipment | (7,674) | (64,697) | (70,016) |
Investment in intangible assets - trading platform | (848,913) | (961,662) | (1,910,771) |
Net cash used in investing activities | (856,587) | (1,026,359) | (1,980,787) |
Financing activities | |||
Issue of share capital | - | 22,000,015 | 22,000,015 |
Share issue costs | - | (1,032,692) | (1,046,158) |
Proceeds from convertible debts | 17,028 | 15,632 | |
Net cash generated in financing activities | - | 20,984,351 | 20,969,489 |
Net increase/(decrease) in cash and cash equivalents | (5,051,077) | 14,394,015 | 9,332,898 |
Cash and cash equivalents at beginning of period | 17,401,774 | 9,561,462 | 9,561,463 |
Effect of foreign exchange translation on cash and equivalents | 50,770 | 476,318 | (1,492,587) |
Cash and cash equivalents at end of period | 12,401,467 | 24,431,795 | 17,401,774 |
Income tax credit (277,214) 125 (530,487) Fair value movement of derivatives - - (136,018) Depreciation of property, plant and equipment 39,120 36,777 77,809 Loss on disposal of property, plant and equipment. - 50,827 51,414 Share-based payments 327,091 551,900 464,111
The principal accounting policies adopted in the preparation of the financial statements are set out in the full accounts for 2014, with these results being prepared consistently. The policies have been consistently applied to all the periods presented, unless otherwise stated.
These financial statements have been prepared in accordance with IAS34 'Interim financial statements'.
The financial information for the year ended 31 December 2014 does not constitute the Group's statutory financial statements for that period. The comparative information for the full year ended 31 December 2014 has, however, been derived from audited statutory financial statements. A copy of the 31 December 2014 statutory financial statements have been delivered to the Registrar of Companies. The auditor's report on those statements was unqualified, did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.
The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The accounting policies have been applied consistently throughout the group for the purposes of the preparation of the interim statements
The Group financial statements consolidate the financial statements of the Company and its subsidiaries (together referred to as 'the Group').
The Directors have prepared a cash flow forecast covering a period extending beyond 12 months from the date of these financial statements. blur is a disruptive and evolving technology company and there are the existence of uncertainties in the forecast as a result. The forecast contains certain assumptions about the performance of the business including growth in future revenue (a key assumption/sensitivity/risk in a rapidly evolving technology business);; the cost model and margins;; and importantly the level of cash recovery from trading. The directors are aware of the risks and uncertainties facing the business as it embarks on its new, Enterprise-focused strategy but the assumptions used are the Directors' best estimate of the future development of the business.
After considering the forecasts and the risks, 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 the annual financial statements. As with any disruptive, evolving technology company there is always an inherent risk over the ability of the Group and Company to continue as a going concern if forecasts are not met and cash resources are not adequate. The financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate.
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