DOTDIGITAL GROUP PLC RNS Number : 7605M
dotDigital Group plc
18 October 2016
FOR IMMEDIATE RELEASE 18 OCTOBER 2016
Analyst meeting today: 9.30am start - at dotdigital's offices, No.1 London Bridge, SE1
Please call Lisa Baderoon if you would like to attend or email:lisa.baderoon@dotdigitalgroup.com
dotdigital's full 2016 Annual Report will be made available on dotdigital's website today:www.dotdigitalgroup.com
dotdigital Group Plc
('dotdigital', the 'Company' or the 'Group')
FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2016
'Strong organic growth and continued international expansion'
dotdigital Group Plc (AIM:DOTD), the leading provider of intuitive software as a service ('SaaS') and managed services to digital marketing professionalsis pleased to announce its Final Results for the year ended 30 June 2016.2016 Highlights
Key performance indicators
• Turnover increased by 26% to £26.9m (2015: £21.4m)
• EBITDA of £8.0m, up 17% (2015: £6.8m)
· Strong cash position of £17.3m at year end (2015: £11.9m)
· Net assets of £23.7m, up 29% (2015: £18.4m)
· EPS up 12% to 1.83p (2015: 1.63p)
· Recurring revenues of 78% (2015: 76%)
· Volumes of emails sent 8.6bn (2015: 6.2bn)
· International growth of 18% (2015: 14%)
• Announced today:Final Dividend proposed of 0.84p per ordinary share (2015: 0.36p), comprised of an ordinary dividend of 0.43p (2015: 0.36p) and a special dividend of 0.41p (2015: nil)- see separate announcement
International growth
EMEA : Europe, Middle East & Africa
· UK revenues grew 21% to £22.0m (2015: 18.3m)
o Over £4m of revenues - up 106% - attributable to increased revenues generated by existing client upselling to new advanced feature adoption
o Average monthly spend per client rose by approximately 29% to circa. £575
o Professional services offering up from £2.8m to £3.1m with gross margins of 60%
· Good progress in South Africa and Middle East with high value clients signed in period
· Good initial traction has been achieved within the Nordics, Benelux and Netherlands through the Magento Partnership
US
· Revenues from the US increased from US$3.0m to US$4.4m, an increase of 43%
· New York office to be main hub across US
· Slow start but recent new hires in sales and business development expected to drive future growth in region
· Alongside the Magento Partnership, new CRM sales initiatives started with Salesforce & MS Dynamics
AsiaPac
· Initial hub in Sydney, Australia with revenues of $0.6m AUS in first 12 months
· Indirect sales model through Magento Connector and new Partnerships now being signed albeit slower than planned due primarily to these trusted new relationships taking longer to be established
· Good progress now being made to span more broadly from Australia into AsiaPac region with opportunities to integrate the dotmailer platform via a direct sales team approach
· Strong pipeline building
Magento connector
· dotmailer named exclusive Global premier partner for its Magentor Connector
· Average monthly recurring revenue spend has grown by 25% to approximately £1,300 per month
· Magento Version 2.1 has now been released which has started to see a good client pipeline emerge in all regions across the world
New clients
· Notable client wins across UK and international in the B2B and B2C sectors include: Vogue UK, Handelsbanken, Saville Group, Dune, Hawes and Curtis, Paul Smith, Eurostar International, Osprey Europe, Edcon, Mr Price and Sol Lingerie
H1 Outlook
· Uncertain macro environment continually being assessed by the Board
· Revenue growth in Q1 over 20%
· Larger monthly spend commit from clients
· Strong uptake of CRM connectors
· Early signs promising for Benelux, Nordics and South Africa markets
Announced Today: Company Secretary Change
· George Kasparian, dotdigital's Non-Board Finance Director, takes over the Company Secretary role from Milan Patel, CEO, with immediate effect
Commenting on the final results and outlook, Milan Patel, Chief Executive Officer, said:
'2016 was a year of continued strong organic, profitable growth for dotdigital. For 2017, our approach will be further refinement of the partner programme and developing the strategic partnerships, global expansion into the EMEA, North America and Asia Pacific regions through self-service and direct sales teams and to continue building new integrations into more ecommerce and CRM platforms that focus on the mid-market and small enterprise space.
The Board believes that the dotmailer platform, with its ease-of-use proposition, deep integrations, professional services, growing list of global partners and its scalability, is well placed to continue to generate strong organic growth not only from the markets it currently operates in today but wider into the global markets it is looking to enter.'
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further enquiries please contact:
dotdigital Group PlcMilan Patel, CEO & CFO | Tel: 020 8662 2777 |
Financial PR and Investor Relations | Tel: 07721 413 496 |
N+1 Singer | Tel: 020 7496 3000 |
finnCap Rhys Williams, Sales | Tel: 020 7220 0500 |
CHAIRMAN'S REPORT
dotdigital has had a successful 2015/16 financial year. The Group returned a profit before tax of £6.2m and EBITDA was slightly ahead of market expectations. We continue to be cash generative and ended up with cash reserves of £17.3m, up from £11.9m at the end of the last financial year.
We continue to make good progress with how we engage with customers and this past year has seen another rise in customer average monthly spend, an increase of 29% on the prior year. Activity on our platform continues to increase and customers sent 8.6 billion emails in 2015/16, up 50% since the previous year. By evolving our range of enhanced product features, which are sold on a recurring model, we grew this part of our business by 106% and this past year it accounted for £4m of sales.
Our overseas business has continued to grow and revenue outside the UK has increased by 58%. In January 2016 we appointed Dan Morris to head up our US operation and in June we moved out of a shared office into a permanent location in New York. Our US region revenues grew by 43% from US$3.0m to US$4.3m in this past year with particular focus on channel partner and Magento sales.
In Autumn 2015, Rohan Lock, previously Head of Sales in the UK, moved back to his native Australia to head up our operations there. Progress has been rather slower than we had planned as some of the major partners we signed have taken slightly longer to deliver their first business. Some of these partners operate across the Asia Pacific market and will be of great assistance as we build our customer base across the region.
dotdigital already has customers in the Middle East and we plan to continue to build this market. During the second half of this financial year we have also started to market to potential clients in the Nordic and Benelux regions and we have had some good success.
Our services business has continued to grow in the past year, achieving 11% growth on the previous year with healthy margins. We have continued to invest considerably in our infrastructure ensuring that the business has the ability to offer the service expected by our customers as our business expands in both the volume of emails we send and the geographical markets in which we operate. To this end we moved our platform to the Cloud in America and Europe with Australia going live early 2017.
Our policy on acquisitions continues as previously: our main focus is on organic growth but we will consider acquisition opportunities, should they arise, and only if they allow us to accelerate growth in a market or provide us with a technical advantage.
In December 2015 we received devastating news that Simone Barratt required surgery. She stepped away from the business to focus on her treatment and Milan Patel was appointed interim CEO. Thankfully Simone's treatment went well but on 20 July 2016 we announced that she was not returning to the business in her role as CEO and she was also stepping down from the Board. We also announced at that time that Milan was appointed as the new permanent CEO. I would like to take this opportunity to thank Simone for her time in the business, initially as a Non-Executive Director and laterally as CEO, and wish her well as she returns to full health.
Milan Patel will continue as CFO until we appoint a new candidate for that role. A search process is currently underway and in the interim Milan is supported by George Kasparian (Non-Board Finance Director), Tink Taylor and Peter Simmonds, who has committed extra days in the business until the new appointment is made.
Following the announcement of Brexit on 24 June we have assessed the impact of the vote to leave the EU. Our initial view is that the outcome, thus far, has not had any immediate effect on our business.
Email marketing continues to offer the best value and marketing return on investment. In addition, the fact we are continuing to grow our business outside the UK will also help mitigate against any slowdown in UK economy resulting from leaving the EU. The Board will keep the impact of Brexit under review.
I would like to take opportunity thank the team at dotdigital for their fantastic contribution to yet another successful year. I would like to say a special thank you to Milan for 'stepping up to the plate' during Simone's illness and for his continued hard work as he settles into the role of CEO.
Notwithstanding any unforeseen economic impact of Brexit and the forthcoming US elections, the outlook for the dotdigital business over the coming years continues to be very promising. We will continue to look for business with interesting opportunities both in the UK and in overseas markets. We plan to continue to grow our business in new geographies both through direct sales and using our strategic partners. Under Milan's stewardship and a strong operating Board I have every confidence we will continue to grow our business and look forward to another successful year ahead.
Frank Beechinor-Collins
Non-Executive Chairman
17 October 2016
CHIEF EXECUTIVE'S REPORT
Introduction
I am pleased to announce that the Group delivered strong organic revenue growth of 26%, which was in line with market expectations. Our earnings before interest, tax, depreciation and amortisation (EBITDA) and profit before tax were both £0.3m ahead of the consensus market forecasts.
This performance is a result of continued strong organic growth, high margins and long-term recurring revenues generated from the dotmailer marketing automation product.
Financial highlights
Revenues up 26% to £26.9m (2015: £21.4m). EBITDA of £8.0m, an increase of 17% (2015: £6.8m). Net assets grew by 29% to £23.7m (2015: 18.4m) with EPS of 1.83p, an increase of 12% (2015: 1.63p).
Review of 2015/16
Revenue performance which grew organically by 26%, was driven by strong growth from both the UK and the international markets. UK grew by 21% from £18.3m to £22.0m through a combination of higher value new client wins and continually being able to monetise the advanced feature adoption by our existing clients through them incrementally building their own marketing cloud. This is evidenced by revenues from functionality related monthly recurring charges now achieving over £4m which is an increase of 106%. We continue to make progress within the international markets with revenues outside of the UK increasing by 58% to £4.9m. This remains a focus for the coming year.
The Group has added notable clients across its markets both locally and internationally in the B2B and B2C sectors. Some of these include: Vogue UK, Handelsbanken, Saville Group, Dune, Hawes and Curtis, Paul Smith, Eurostar International, Osprey Europe, Edcon, Mr Price and Sol Lingerie.
In addition, we have seen a strong performance from our enabling professional services offerings, with an increase in revenue from £2.8m to approximately £3.1m, which delivers gross margins in the region of 60%.
During the year, the Group's average monthly spend per client rose by 29% to spend levels of circa £575 per month. This is as a result of continued focus on mid-market, enterprise clients and the Magento connector clients who spend on average of over £1,300 per month.
EMEA (Europe, Middle East & Africa)
EMEA has performed strongly, with growth in the UK of 21% driven by continuing to upsell the advanced functionality to our existing client base and a reasonable number of new client sign ups in the UK with a high spend level. We have also seen good traction within South Africa and Middle East, with high value clients being signed. In building the dotmailer brand within EMEA, we have seen an increased number of leads and traffic to the site in Western Europe. Senior management with the support of the Board of Directors, are investigating both the potential and benefit of implementing a self-serve model to take advantage of the traffic being seen outside of the UK in the markets where we do not currently operate. The end goal being to test the market proposition with a relatively low investment.
Through the partnership with Magento and the joint marketing efforts, we are increasingly seeing partnership referrals from both system integrators and technology partners in both the Nordics and Benelux regions. Encouragingly there has been an increase in the number of clients coming on board from the Netherlands.
Although it is too early to tell, the dotmailer proposition has also been well received within United Arab Emirates and South Africa, where we have seen numerous client signups in this financial year. Our aim is to continue to market into both these regions and assess our sales strategy in the coming period.
North America
Our US region has continued to perform well with revenues growing by 43% from $3.0m USD to $4.3m although this was slightly slower than originally anticipated because of delayed progress in recruiting good talent in the US market. During the year we hired new leadership that is business development focused and invested in key new hires within services to help support future growth of this region and we expect this to start to drive growth late in the 2016/17 financial year.
Additionally the pricing and bundles strategy has been adapted through the learnings we took operating within the US to be more competitive, by moving away from pricing on a monthly commitment to volume of messages to pricing based on number of contacts stored. Early response to this change is showing good signs of acceptance by the prospects.
A key decision made in the year was to postpone the opening of the West Coast and mid-US office for now and this will be reassessed once the pricing and leadership have seen demand build. Therefore the plan going forward is to continue to sell and service these regions from our East Coast office.
In the year we were in search of a Channel Director to build our channel strategy to take advantage of new partners and indirect relationships. However due to the competitive environment, as an alternative we engaged a consultancy to assist us in building a channel partner programme which has now been implemented and is being controlled by the new General Manager for the North American region.
Asia Pacific
We initially entered the Asia Pacific market through creating a hub from Australia and using an indirect channel model focused on sales on our Magento connector. When we entered into the Asia Pacific market, we chose to work with partners that already had a solid client base in the region. This strategy was slow to gain traction in the beginning, however relationships are now very strong. In June we took the decision, through the feedback we received to build a team which is selling directly into both Australia and the broader Asia Pacific region. Early signs have been promising. We have seen revenues of $0.6m AUS in the first 12 months of establishing our Sydney office.
Connectors
Further recruitment was made into the platform engineering team combined with an increased emphasis on enhancing our Microsoft Dynamics, Salesforce and Magento connectors. As part of our continued commitment to scalability, we have put these connectors into our cloud hosting environment and plan to add additional functionality to further penetrate this opportunity.
CRM
There has been an increased uptake of our CRM connectors with new prospects starting with some form of integration to make the data synchronisation process painless. We have recently partnered with ORO CRM which targets midsize B2B ecommerce. The development of the connector has started and is scheduled to be complete in early January 2017. It is expected that we will continue to devote further resources to CRM integrations in 2017.
E-commerce
In the year, dotmailer was named the exclusive global premier partner for its Magento connector in the marketing automation space. We are proud to have our connector endorsed by Magento who are the market leaders for midmarket ecommerce solutions. However, uptake to Magento enterprise's Version 2 platform has been slower than anticipated due to ecommerce clients being risk averse and waiting for Version 2.1. This has now been released by Magento, which has started to see strong pipeline of this version in all regions across the world.
Going forward, our aim is to continue to build and develop strong relationships with Magento and its system integrators. In the period, monthly recurring revenues from this connector have continued to show strong growth of 25% year-on-year spend, with the average monthly client spend being considerably higher at £1,300 per month compared to £575 per month for the entire client base.
At the same time there has been a rise in other ecommerce platforms such as Woo Commerce, and Shopify + within the mid-market segment, so we are evaluating the opportunity of building connectors into these platforms
Technology, product development and support
Throughout this year we have rearchitected the dotmailer system with the use of Hybrid cloud infrastructure, which is a very innovative way of building scale. The data processing and storage is now done through using Microsoft Azure cloud technology. We currently have both North America and Europe covered, with the plan of deploying Asiapac early 2017. This will give dotmailer a unique selling point by having the ability to process data, in three separate continents, from a data privacy, latency and redundancy perspectives. With the move to the cloud another added advantage is that it provides burst for processing and storage during seasonal demands such as Christmas, Black Friday and Cyber Monday as opposed to having to invest further in hardware.
The tenets of our product development strategy remain 'Ease of Use' and 'Ease of Intergration'. Our highly skilled developers continue to create functionality that makes it easy for marketers to understand, deliver complex marketing processes and integrate with best-of-breed platforms they already use. The product steering team are now looking to build further functionality that matches our tenets and fits the sweet spot characteristics of our customers.
We have continued to invest in our support team, as we have started to build more of an international presence, with highly skilled in-region teams, which help and support our connectors, solve complex support issues and provide round-the-clock assistance to all our customers.
People
After a six month term as Interim Chief Executive Officer following Simone's departure from the business, I have taken over this position permanently as of July 2016. Throughout the interim period we continued to deliver on the original organic strategy set by Simone at the beginning of the year.
We have also made some changes in the senior management team which looks after the day-to-day management of the business. The main area of change is within sales and operations.
The Global EVP of sales has been replaced by the Chief Marketing Officer, who is now responsible for both sales and marketing teams in the UK, to allow closer alignment and to give more transparency on the end-to-end sales funnel management. This has allowed us to create local sales leaders in every region.
Following the year end, the COO departed and the Board has taken the decision to split the responsibilities amongst the senior team with customer success being a core CEO focus. This will also allow the direct reports to ensure prioritisation for client experience in the short term.
We believe our people are so important for our business and its future and therefore further investment will be made in the training and development of all our employees. We are also looking to appoint a CFO who will be able to mentor the Finance Director and support me with the day-to-day needs.
Cash generation
The business continues to be highly cash generative, with cash at the end of the period standing at £17.3m, which represents an increase of 45% on the prior year (2015: £11.9m) after capital expenditure and product development of £2.1m. The Group continues to be debt free and maintains a healthy balance sheet. Highly efficient cash collection processes, along with over 40% of the monthly UK recurring revenue being collected by Direct Debit, combined with the implementation of enhanced global strategies through ACH collection and a global card payment processor have contributed to the Group's strong cash position at the year end.
Dividend policy
I am pleased to announce that the Board has conducted its review of its business plan for the next three years. This included evaluating the cash needs required for opportunities in organic growth to increase shareholder value, capital expenditure and any possible future acquisitions that could be earnings enhancing. It has decided that it will keep a progressive dividend policy in line with EBITDA growth, supplemented by special dividends from time to time.
Therefore, subject to approval at the AGM in December 2016, the Board proposes that the Group will pay a regular dividend of 0.43 pence per ordinary share; and in addition, for this reporting period and also proposes a special dividend of 0.41 pence per ordinary share both to be payable at the end of January 2017.
Growth strategy
During the year we evaluated a number of potential acquisition opportunities in the email marketing space. However, as in prior years, none of the businesses evaluated would create long-term shareholder value when integration risks and migration of clients was factored in. We will continue to consider acquisition opportunities of bolt-on technologies, whitelabels of our product and other email service providers.
We anticipate further organic growth by focussing on the following three key areas:
1. Geographic expansion
International expansion investment will be higher to gain wider brand awareness and market presence within EMEA, North America and Asia Pacific. We will continue to test the market appetite and proposition in these regions to understand which will generate the highest returns for our modest spend in sales and marketing. As we start to gain traction and see opportunities in any specific territory, we will adapt our model for these markets. Following this we could offer initially a self-serve product followed by or combined with a direct sales team. The infrastructure for this will be the three main hubs in the UK, US and Australia.
2. Product Innovation
We will continue to diversify our revenues by integrating with new technologies within the ecommerce and CRM space plus any other technology platforms that make it easier for our midmarket customers to achieve an increased return on investment from their marketing campaigns. To date we have been able to monetise the functionality that we build through incremental recurring functionality charges which are sold onto our new and existing customers as and when they need them. This will continue to remain a very high priority for me.
3. Strategic partnerships
We will continue to work closely with Magento on joint marketing efforts for more sign-ups to the Magento Version 2.1 and subsequently increasing the use within that community of the dotmailer platform. We have also started to develop further partnerships with PayPal to bring a one click purchase offering for our ecommerce clients.
Looking forward
With the combination of both a self-serve model and the direct sales team approach, we will be able to penetrate further into the EMEA, North American and Asia Pacific regions. Early indications are encouraging although as expected it will take some time to increase the brand presence in those markets. We have seen increased numbers of customers from Netherlands, South Africa, UAE and parts of Western Europe combined with the core UK market seeing growth in digital marketing budgets.
In readiness for an increased focus on international revenue growth, we now have a platform that is globally scalable both from an infrastructure and global payments solution perspective. The self-serve model will start to be deployed during the second quarter of the new financial year. By the third quarter we expect to have data processing and storage within the three central hub regions, which will be a unique selling point for prospects and clients especially in the Australian region.
After the initial venture into the Australian region, we have now put in a direct sales team and support network for them following the learnings from being there for 12 months. As a direct consequence, early signs indicate an increased number of sign-ups from customers and early pipeline build-up from the Asian markets.
Magento Version 2.1 pipeline is accelerating globally, which is encouraging for us as we try to take advantage of both an existing client migration from Version 1 to 2 perspective and a new ecommerce installation within the mid-market and small enterprise space. We will continue to build and develop our relationship to take advantage of this. We will also continue to build new strategic relationships with the technology partners that we integrate with.
With the increased focus last year on building the partner programme by the use of an outside consultancy firm, we have seen good growth in the international partner network building and the existing relationships will strengthen as we go into the new financial year.
The ongoing investment in CRM connectors and other advanced functionality development has helped the Group continue to increase functionality based recurring charges which should lower attrition levels in our customer base. We will continue to add new integrations with best-of-breed technology platforms that target the mid-market and small enterprise space as a high priority for the platform engineering team.
The Board will continue to assess the impact of Brexit and macro-economic uncertainty over the coming year.
In summary, our approach for 2017 will be further refinement of the partner programme and developing the strategic partnerships, global expansion into the EMEA, North America and Asia Pacific regions through self-serve and direct sales teams and to continue building new integrations into more ecommerce and CRM platforms that focus on the mid-market and small enterprise space.
The Board believes that the dotmailer platform, with its ease-of-use proposition, deep integrations, professional services, growing list of global partners and its scalability, is well placed to continue to generate strong organic growth not only from the markets it currently operates in today but wider into the global markets it is looking to enter.
Milan Patel
Chief Executive Office
17 October 2016
DOTDIGITAL GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2016
30.6.16 | 30.6.15 | |||||||
£'000 | £'000 | |||||||
Notes | ||||||||
CONTINUING OPERATIONS | ||||||||
Revenue | 26,926 | 21,366 | ||||||
Cost of sales | (3,395) | (2,292) | ||||||
Gross profit | 23,531 | 19,074 | ||||||
Administrative expenses | 6 | (17,367) | (13,858) | |||||
OPERATING PROFIT | 6,164 | 5,216 | ||||||
Finance income | 5 | 51 | 27 | |||||
PROFIT BEFORE INCOME TAX | 6 | 6,215 | 5,243 | |||||
Income tax expense | 7 | (847) | (587) | |||||
Profit for the year from continuing operations | 5,368 | 4,656 | ||||||
Profit for the year attributable to the owners of the parent | 5,368 | 4,656 | ||||||
Earnings per share from continuing operations (pence per share) | ||||||||
Basic | 10 | 1.83 | 1.63 | |||||
Diluted | 10 | 1.83 | 1.61 | |||||
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Notes | |||||||
PROFIT FOR THE YEAR | 5,368 | 4,656 | |||||
OTHER COMPREHENSIVE INCOME | |||||||
Items that may be subsequently reclassified to profit and loss: | |||||||
Exchange differences on translating foreign operations | 11 | 3 | |||||
Total comprehensive income attributable to: | |||||||
Owners of the parent | 5,379 | 4,659 | |||||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | |||||||
Comprehensive income from continuing operations | 5,379 | 4,659 | |||||
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 JUNE 2016
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Notes | |||||||
ASSETS | |||||||
NON-CURRENT ASSETS | |||||||
Goodwill | 11 | 609 | 609 | ||||
Intangible assets | 12 | 3,684 | 3,444 | ||||
Property, plant and equipment | 13 | 1,142 | 1,097 | ||||
5,435 | 5,150 | ||||||
CURRENT ASSETS | |||||||
Trade and other receivables | 15 | 6,206 | 5,328 | ||||
Cash and cash equivalents | 16 | 17,313 | 11,932 | ||||
23,519 | 17,260 | ||||||
TOTAL ASSETS | 28,954 | 22,410 | |||||
EQUITYATTRIBUTABLE TO THE | |||||||
OWNERS OF THE PARENT | |||||||
Called up share capital | 17 | 1,473 | 1,435 | ||||
Share premium | 18 | 6,138 | 5,382 | ||||
Reverse acquisition reserve | 18 | (4,695) | (4,695) | ||||
Other reserves | 18 | 174 | (25) | ||||
Retranslation reserve | 18 | 8 | (3) | ||||
Retained earnings | 18 | 20,611 | 16,297 | ||||
TOTAL EQUITY | 23,709 | 18,391 | |||||
LIABILITIES | |||||||
NON-CURRENT LIABILITIES | |||||||
Deferred tax | 22 | 716 | 383 | ||||
CURRENT LIABILITIES | |||||||
Trade and other payables | 19 | 4,151 | 3,437 | ||||
Current tax payable | 378 | 199 | |||||
4,529 | 3,636 | ||||||
TOTAL LIABILITIES | 5,245 | 4,019 | |||||
TOTAL EQUITY & LIABILITIES | 28,954 | 22,410 | |||||
DOTDIGITAL GROUP PLC
COMPANY STATEMENT OF FINANCIAL POSITION
30 JUNE 2016
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Notes | |||||||
ASSETS | |||||||
NON-CURRENT ASSETS | |||||||
Investments | 14 | 5,186 | 5,186 | ||||
5,186 | 5,186 | ||||||
CURRENT ASSETS | |||||||
Trade and other receivables | 15 | 7,102 | 3,124 | ||||
Cash and cash equivalents | 16 | 639 | 166 | ||||
7,741 | 3,290 | ||||||
TOTAL ASSETS | 12,927 | 8,476 | |||||
EQUITYATTRIBUTABLE TO THE | |||||||
OWNERS OF THE PARENT | |||||||
Called up share capital | 17 | 1,473 | 1,435 | ||||
Share premium | 18 | 6,138 | 5,382 | ||||
Other reserves | 18 | 174 | (25) | ||||
Retained earnings | 18 | 5,080 | 1,534 | ||||
TOTAL EQUITY | 12,865 | 8,326 | |||||
LIABILITIES | |||||||
CURRENT LIABILITIES | |||||||
Trade and other payables | 19 | 62 | 150 | ||||
TOTAL LIABILITIES | 62 | 150 | |||||
TOTAL EQUITY & LIABILITIES | 12,927 | 8,476 | |||||
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Called up share | Retained | Share | ||||||
capital | earnings | premium | ||||||
£'000 | £'000 | £'000 | ||||||
Balance as at 1 July 2014 | 1,414 | 12,211 | 5,147 | |||||
Issue of share capital | 21 | - | 235 | |||||
Share repurchase | - | - | - | |||||
Dividends | - | (570) | - | |||||
Share-based payment | - | - | - | |||||
Transactions with owners | 21 | (570) | 235 | |||||
Profit for the year | - | 4,656 | - | |||||
Other comprehensive income | - | - | - | |||||
Total comprehensive income | - | 4,656 | - | |||||
Balance as at 30 June 2015 | 1,435 | 16,297 | 5,382 | |||||
Issue of share capital | 38 | - | 756 | |||||
Dividends | - | (1,054) | - | |||||
Share-based payment | - | - | - | |||||
Transactions with owners | 38 | (1,054) | 756 | |||||
Profit for the year | - | 5,368 | - | |||||
Other comprehensive income | - | - | - | |||||
Total comprehensive income | - | 5,368 | - | |||||
Balance as at 30 June 2016 | 1,473 | 20,611 | 6,138 | |||||
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Retranslation | Reverse acquisition | Other | Total equity | |||||
reserve | reserve | reserves | ||||||
£'000 | £'000 | £'000 | £'000 | |||||
Balance as at 1 July 2014 | (6) | (4,695) | 82 | 14,153 | ||||
Issue of share capital | - | - | - | 256 | ||||
Share repurchase | - | - | (213) | (213) | ||||
Dividends | - | - | - | (570) | ||||
Share-based payments | - | - | 106 | 106 | ||||
Transactions with owners | - | - | (107) | (421) | ||||
Profit for the year | - | - | - | 4,656 | ||||
Other comprehensive income | 3 | - | - | 3 | ||||
Total comprehensive income | 3 | - | - | 4,659 | ||||
Balance as at 30 June 2015 | (3) | (4,695) | (25) | 18,391 | ||||
Issue of share capital | - | - | - | 794 | ||||
Dividends | - | - | - | (1,054) | ||||
Share-based payments | - | - | 199 | 199 | ||||
Transactions with owners | - | - | 199 | (61) | ||||
Profit for the year | - | - | - | 5,368 | ||||
Other comprehensive income | 11 | - | - | 11 | ||||
Total comprehensive income | 11 | - | - | 5,379 | ||||
Balance as at 30 June 2016 | 8 | (4,695) | 174 | 23,709 | ||||
· Share capital is the amount subscribed for shares at nominal value.
· Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
· Share premium represents the excess of the amount subscribed for share capital over the nominal value of the net share issue expenses.
· Retranslation reserve relates to the retranslation of foreign subsidiaries into the functional currency of the Group.
· The reverse acquisition reserve relates to the adjustment required to account for the reverse acquisition in accordance with International Financial Reporting Standards.
· Other reserves relates to the charge for the share-based payment in accordance with International Financial Reporting Standard 2 and shares repurchased in the year classified as treasury shares.
DOTDIGITAL GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Called up share | Retained | Share | Other | |||||||
capital | earnings | premium | Reserves | Total equity | ||||||
£'000 | £'000 | £'000 | £'000 | £'000 | ||||||
Balance as at 1 July 2014 | 1,414 | 2,423 | 5,147 | 82 | 9,066 | |||||
Issue of share capital | 21 | - | 235 | - | 256 | |||||
Dividends | - | (570) | - | - | (570) | |||||
Share repurchase | - | - | - | (213) | (213) | |||||
Share-based payments | - | - | - | 106 | 106 | |||||
Transactions with owners | 21 | (570) | 235 | (107) | (421) | |||||
Loss for the year | - | (319) | - | - | (319) | |||||
Total comprehensive income | - | (319) | - | - | (319) | |||||
Balance as at 30 June 2015 | 1,435 | 1,534 | 5,382 | (25) | 8,326 | |||||
Issue of share capital | 38 | - | 756 | - | 794 | |||||
Dividends | - | (1,054) | - | - | (1,054) | |||||
Share-based payments | - | - | - | 199 | 199 | |||||
Transactions with owners | 38 | (1,054) | 756 | 199 | (61) | |||||
Profit for the year | - | 4,600 | - | - | 4,600 | |||||
Total comprehensive income | - | 4,600 | - | - | 4,600 | |||||
Balance as at 30 June 2016 | 1,473 | 5,080 | 6,138 | 174 | 12,865 | |||||
· Share capital is the amount subscribed for shares at nominal value.
· Retained earnings represents the cumulative earnings of the Company attributable to equity shareholders.
· Share premium represents the excess of the amount subscribed for share capital over the nominal value of the net share issue expenses.
· Other reserves relates to the charge for the share-based payment in accordance with International Financial Reporting Standard 2. Other reserves relate to the charge for the share-based payment in accordance with International Financial Reporting Standard 2 and shares repurchased in the year classified as treasury shares.
DOTDIGITAL GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
30.6.16 | 30.6.15 | |||||
£'000 | £'000 | |||||
Notes | ||||||
Cash flows from operating activities | ||||||
Cash generated from operations | 27 | 7,997 | 5,667 | |||
Tax paid | (335) | (263) | ||||
Net cash generated from operating activities | 7,662 | 5,404 | ||||
Cash flows from investing activities | ||||||
Purchase of intangible fixed assets | (1,570) | (1,612) | ||||
Purchase of tangible fixed assets | (502) | (667) | ||||
Sale of tangible fixed assets | - | 1 | ||||
Interest received | 51 | 27 | ||||
Net cash flows used in investing activities | (2,021) | (2,251) | ||||
Cash flows from financing activates | ||||||
Equity dividends paid | (1,054) | (570) | ||||
Share issue | 794 | 256 | ||||
Share repurchase | - | (213) | ||||
Net cash flows (used)/from financing activities | (260) | (527) | ||||
Increase in cash and cash equivalents | 5,381 | 2,626 | ||||
Cash and cash equivalents at beginning of year | 28 | 11,932 | 9,306 | |||
Cash and cash equivalents at end of year | 28 | 17,313 | 11,932 | |||
DOTDIGITAL GROUP PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Notes | |||||||
Cash flows from operating activities | |||||||
Cash generated from operations | 27 | 733 | 584 | ||||
733 | 584 | ||||||
Net cash generated from operating activities | |||||||
Cash flows from financing activates | |||||||
Equity dividends paid | (1,054) | (570) | |||||
Share issue | 794 | 256 | |||||
Share repurchase | - | (213) | |||||
Net cash flows (used)/from financing activities | (260) | (527) | |||||
Increase in cash and cash equivalents | 473 | 57 | |||||
Cash and cash equivalents at beginning of year | 28 | 166 | 109 | ||||
Cash and cash equivalents at end of year | 28 | 639 | 166 | ||||
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
1. GENERAL INFORMATION
dotdigital Group Plc ('dotdigital') is a company incorporated in England and Wales and quoted on the AIM Market.
2. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) and those parts of Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.
The Group has applied all accounting standards and interpretations issued by the International Accountancy Standards Board and International Accounting Interpretations Committee effective at the time of preparing the financial statements.
New and amended standards adopted by the Group
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 July 2015 that would be expected to have a material impact on the Group.
Standards, interpretations and amendments to published standards that are not yet effective.
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 July 2015 and have not been early adopted:
Reference | Title | Summary | Application date of standard | Application date of Group |
IFRS 2 | Share-based Payment | Classification and measurement of share-based payment transactions | Periods beginning on or after 1 January 2018 | 1 July 2018 |
IFRS 7 | Financial Instruments: Disclosures | Deferral of mandatory effective date of IFRS9 and amendments to transition disclosures | Periods beginning on or after 1 January 2015 | 1 July 2015 |
IFRS 9 | Financial Instruments | Finalised version, incorporating requirements for classification and measurement, impairment, general hedge accounting and derecognition | Periods beginning on or after 1 January 2018. | 1 July 2018 |
IFRS 10 | Consolidated financial statements | Amendments regarding the application of the consolidation exceptions | Periods beginning on or after 1 January 2016 | 1 July 2016 |
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued | ||
IFRS 12 | Disclosure of interest in other entities | Amendments regarding the application of the consolidation exceptions | Periods beginning on or after 1 January 2016 | 1 July 2016 |
IFRS 14 | Regulatory deferral accounts | Original issue of standard | Periods beginning on or after 1 January 2016 | 1 July 2016 |
IFRS 15 | Revenue from contracts with customers | Original issue of standard | Periods beginning on or after 1 January 2018 | 1 July 2018 |
IFRS 16 | Leases | Original issue of standard | Periods beginning on or after 1 January 2019 | 1 July 2019 |
IAS 1 | Presentation of financial statements | Amendments resulting from the disclosure initiative | Periods beginning on or after 1 January 2016 | 1 July 2016 |
IAS 7 | Statement of cash flows | Disclosure initiatives | Periods beginning on or after 1 January 2017 | 1 July 2017 |
IAS 12 | Income taxes | Amendments regarding the Recognition of deferred tax assets for unrealised losses | Periods beginning on or after 1 January 2017 | 1 July 2017 |
IAS 27 | Separate financial statements | Amendments reinstating the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity's separate financial statements | Periods beginning on or after 1 January 2016 | 1 July 2016 |
IAS 28 | Investments in associates and joint ventures | Amendments regarding the sale or contribution of assets between investor and its associate or joint venture. Amendments regarding the application of the consolidation exceptions | Periods beginning on or after 1 January 2016 | 1 July 2016 |
IAS 38 | Intangible assets | Amendments regarding the clarification of acceptable methods of depreciation and amortisation | Periods beginning on or after 1 January 2016 | 1 July 2016 |
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
| |||
IAS 16 | Property, Plant and Equipment | Amendments regarding the clarification of acceptable methods of depreciation and amortisation | Periods beginning on or after 1 January 2016 | 1 July 2016 |
IAS 19 | Employee benefits | Amendments resulting from September 2014 Annual Improvements to IFRSs | Periods beginning on or after 1 January 2016 | 1 July 2016 |
The Directors anticipate that the adoption of these standards and the interpretations in future periods will have no material impact on the financial statements of the Group.
The financial statements are presented in sterling (£), rounded to the nearest thousand pound.
Basis of consolidation
In the period ended 2009 the Company acquired via a share for share exchange the entire issued share capital of dotmailer Limited, whose principal activity is that of web and email-based marketing.
Under IFRS 3 'Business combinations' the dotmailer Limited share exchange has been accounted for as a reverse acquisition. Although these consolidated financial statements have been issued in the name of the legal parent, the Company it represents in substance is a continuation of the financial information of the legal subsidiary, dotmailer Limited. The following accounting treatment has been applied in respect of the reverse acquisition:
- The assets and liabilities of the legal subsidiary, dotmailer Limited, are recognised and measured in the consolidated financial statements at their pre-combination carrying amounts, without restatement to their fair value;
- The retained reserves recognised in the consolidated financial statements for the beginning of the prior period reflect the retained reserves of dotmailer Limited to 30 April 2008. However, in accordance with IFRS3 'Business combinations' the equity structure appearing in the consolidated financial statements reflects the equity structure of the legal parent dotdigital Group Plc, including the equity instruments issued under the share exchange to effect the business combination;
- A reverse acquisition reserve has been created to enable the presentation of a consolidated balance sheet which combines the equity structure of the legal parent with the non-statutory reserves of the legal subsidiary;
- Comparative numbers are prepared on the same basis.
The following accounting treatment has been applied in respect of the acquisition of dotdigital Group Plc:
- The assets and liabilities of dotdigital Group Plc are recognised and measured in the consolidated financial statements at their fair value at the date of acquisition.
- The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the date of acquisition, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
Subsidiaries
A subsidiary is an entity whose operating and financing policies are controlled by the Group. Subsidiaries are
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued | ||
consolidated from the date on which control was transferred to the Group. Subsidiaries cease to be consolidated from
the date the Group no longer has control. Intercompany transactions, balances and unrealised gains on transactions between Group companies have been eliminated on consolidation.
As a result of applying reverse acquisition accounting since 30 January 2009, the consolidated IFRS financial information of dotdigital Group Plc is a continuation of the financial information of dotmailer Limited.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is shown net of value added tax returns, rebates and discounts after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that the future economic benefits will flow to the entity. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
The Group sells web-based marketing services to other businesses and services are either provided on a usage basis or fixed price bespoke contract. Revenue from contracts are recognised under percentage of completion method based on a percentage of services performed to date as a percentage of the total services to be performed.
Going concern
The Directors, at the time of approving the financial statements, have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further detail is contained in the Business review.
Operating profit
Operating profit is stated after charging operating expenses but before finance costs.
Dividends
Final dividend distributions to the Company's shareholders are recognised as a liability in the financial statements in the period in which the dividends are approved by the Company's shareholders while interim dividends distributions are recognised in the period in which the dividends are declared and paid.
Goodwill
Goodwill represents the excess of the fair value of the consideration over the fair values of the identifiable net tangible and intangible assets acquired.
Under IFRS 3 'Business Combinations', goodwill arising on acquisitions is not subject to amortisation but is subject to annual impairment testing. Any impairment is recognised immediately in the income statement and not subsequently reversed.
Investments in subsidiaries
Investments are held as non-current assets at cost less any provision for impairment. Where the recoverable amount of the investment is less than the carrying amount, impairment is recognised.
Intangible assets
Intangible assets are recorded as separately identifiable assets and recognised at historical cost less any accumulated amortisation. These assets are amortised over their useful economic lives four to five years, with the charge included in administrative expenses in the income statement.
Intangible assets are reviewed for impairment annually. Impairment is measured by determining the recoverable amount of an asset or cash generating unit (CGU) which is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. | ACCOUNTING POLICIES - continued |
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or
CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU.
- Domain names
Acquired domain names are shown at historical cost. Domain names have a finite life and are carried at cost less accumulated amortisation. Amortisation is calculated using straight-line method to allocate the cost of domain names over their useful lives of four years.
- Software
Acquired software and websites are shown at historical cost. They have a finite life and are carried at cost less accumulated amortisation. Amortisation is calculated using straight-line method to allocate the cost of software and websites over their useful lives of four years.
- Product development
Product development expenditure is capitalised when it is considered that there is a commercially and technically viable product, the related expenditure is separately identifiable and there is a reasonable expectation that the related expenditure will be exceeded by future revenues. Following initial recognition, product developments are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of these intangible assets are assessed to have a finite life of five years. Amortisation is charged on assets with finite lives, and until economic benefit can be received and recognised, this expense is taken to the income statement and useful lives are reviewed on an annual basis. Amortisation is charged from the point when the asset is available for use.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which they are ready for use on a straight-line basis over their useful life.
Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria are fulfilled:
- It is technically feasible to complete the intangible asset so that it will be available for use or resale;
- Management intends to complete the intangible asset and use or sell it;
- There is an ability to use or sell the intangible assets;
- It can be demonstrated how the intangible asset will generate possible future economic benefits;
- Adequate technical, financial and other resource to complete the development and to use or sell the intangible asset are available; and
- The expenditure attributable to the intangible asset during its development can be reliably measured.
Impairment of non-financial assets (excluding goodwill)
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.
Property, plant and equipment
Tangible non-current assets are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate, only
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. | ACCOUNTING POLICIES - continued |
when it is probable that future economic benefits are associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation is provided at the following rates in order to write off each asset over its estimated useful life and is based on the cost of assets less residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.
Short leasehold: over the term of the lease
Fixtures and fittings: 25% on cost
Computer equipment: 25% on cost
The assets' residual values and useful economic lives are reviewed and adjusted, if appropriate, at each reporting date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable value.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within other (losses) or gains in the income statement.
Capital risk management
The Group manages its capital to ensure it is able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash equivalents and equity attributable to the owners of the parent as disclosed in the statement of changes in equity.
Taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current tax
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date.
Deferred taxation
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary difference will be utilised.
Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income asset is realised or deferred income tax liability is settled.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. | ACCOUNTING POLICIES - continued |
Operating leases
Rent payable under operating leases is not recognised in the Group's statement of financial position. Such costs are expensed on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total expense, over the term of the lease.
Financial instruments
Financial assets and financial liabilities are recognised on the statement of financial position when an entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in the income statement.
- Financial assets
The Group's accounting policies for financial assets are set out below.
Management determine the classification of its financial assets at initial recognition depending on the purpose for which the financial assets were acquired and, where allowed and appropriate, revaluate this designation at every reporting date.
All financial assets are recognised on a trade date when, and only when, the Group becomes a party to the contractual provisions of an instrument. When financial assets are recognised initially, they are measured at fair value plus transaction costs, except for those finance assets classified as at fair value through profit or loss ('FVTPL'), which are initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets at FVTPL, 'held-to-maturity' investments, 'available for sale' (AFS) financial assets and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred.
At each reporting date, financial assets are reviewed to assess whether there is objective evidence of impairment. If any such evidence exists, impairment loss is determined and recognised based on the classification of the financial asset.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. | ACCOUNTING POLICIES - continued |
Loans and receivables (including trade receivables, prepayments, deposits and other receivables, cash and bank balances) are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. At each reporting date subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective interest method, less any identified impairment losses. An impairment loss is recognised in the statement of comprehensive income when there is objective evidence that the asset is impaired, and is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent periods when an increase in the asset's recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
- Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are also included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows
- Trade receivables
Trade receivables are recognised initially at the lower of their original invoiced value and recoverable amount. A provision is made when it is likely that the balance will not be recovered in full. Terms on receivables range from 30 to 90 days.
- Financial liabilities and equity
Financial liabilities and equity are recognised on the Group's statement of financial position when the Group becomes a party to a contractual provision of an instrument. Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of transaction costs.
The Group's financial liabilities include trade payables and accrued liabilities.
- Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Terms on accounts payable range from 10 to 90 days.
Foreign currency risk
Currency risk is the risk that the holding of foreign currencies will affect the Group's position as a result of a change in foreign currency exchange rates. The Group has no significant foreign currency risk as most of the Group's financial assets and liabilities are denominated in functional currencies of relevant Group entities. Accordingly, no quantitative market risk disclosures or sensitivity analysis for currency risks have been prepared.
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
(b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
(c) all resulting exchange differences are recognised in other comprehensive income.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued | ||
Equity
Share capital is the amount subscribed for shares at their nominal value.
Share premium represents the excess of the amount subscribed for the share capital over the nominal value of the respective shares net of share issue expenses.
Retained earnings represent the cumulative earnings of the Group attributable to equity shareholders.
The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance with IFRS3 'Business combinations'.
Other reserves relate to the charge for share-based payments in accordance with IFRS2 'Share-based payments'.
Share-based payments
For equity-settled share-based payment transactions the Group, in accordance with IFRS 2 'Share-Based Payments' measures their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. The fair value of those equity instruments is measured at the grant date using the trinomial method. The expense is apportioned over the vesting period of the financial instrument and is based on the number which is expected to vest and the fair value of those financial instruments at the date of grant. If the equity instruments granted vest immediately, the expense is recognised in full.
Functional currency translation
- Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (functional currency), which is mainly pounds sterling (£) and it is this currency the financial statements are presented in.
- Transaction and balances
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Employee benefit costs
The Group operates a defined contribution pension scheme. Contributions payable by the Group's pension scheme are charged to the income statement in the period in which they relate.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments as identified by the Board of Directors.
Critical accounting adjustments
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Judgements
(a) Capitalisation of development costsOur business model is underpinned by our email and cross-channel marketing automation platform, dotmailer. Internal activities are continually undertaken to enhance and maintain the product in a bid to stay ahead of our competition. Management review the work of developers during the period and make the
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2014
2. | ACCOUNTING POLICIES - continued |
following judgements:
-Internal work relating to product development is reviewed against IAS 38 criteria and will be capitalised if management feel the criteria have been met.
-Internal work relating to the maintenance of existing products is expensed to the income statement and accounted for in payroll costs.
Estimates and assumptions
(a) Estimated impairment of goodwill
The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering the net present value of discounted cash flow forecasts which have been discounted at 10%. The cash flow projections are based on the assumption that the Group can realise projected sales. A prudent approach has been applied with no residual value being factored
Further details on the estimates and assumptions we make in our annual impairment testing of goodwill are included in note 11 to the Financial Statements. At the period end, based on the assumptions, there was no indication of impairment to the carrying value of goodwill.
(b) Share-based compensation
Key management believe that there will not be only one acceptable choice for estimating the fair value of share-based payment arrangements. The judgements and estimates that management apply in determination of the share-based compensation are summarised below:
-Selection of a valuation model
-Making assumptions used in determining the variables used in a valuation model
i. expected life
ii. expected volatility
iii. expected dividend yield
iv. interest rate
Further detail on the estimates and assumptions we make in our share-based compensation are included in note 26 to the financial statements. The charge made to income statement for period is also disclosed here.
(c) Depreciation and amortisation
The Group depreciates short leasehold, fixtures and fittings, computer equipment and amortises computer software, internally generated development costs and domain names on a straight-line method over the estimated useful lives. The estimated useful lives reflect the Directors' estimate of the periods that the Group intends to derive future economic benefits from the use of the Group's short leasehold fixtures and fittings, computer equipment, computer software, internally generated development costs and domain names.
(d) Bad debt provision
We perform ongoing credit evaluations of our customers and grant credit based upon past payment history, financial condition and anticipated industry conditions. Customer payments are regularly monitored and a provision for doubtful accounts is established based upon specific situations and overall industry conditions. Hence the provision is maintained for potential credit losses based upon management's assessment of the expected collectability of all accounts receivable. In making this assessment, management take into consideration (i) any circumstances of which we are aware regarding a customer's inability to meet its financial obligations and (ii) our judgements as to potential prevailing economic conditions in the industry and their potential impact on the Group's customers.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
3. SEGMENTAL REPORTING
The Group's single line of business is the provision of web-based marketing services. The chief operating decision-maker considers the Group's only reportable segment to be by geographical location, this being UK, US and rest of the world ('RoW') operations as shown below:
30.06.2016 | ||||||||
UK | US | RoW | Total | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Income statement | ||||||||
Revenue | 22,056 | 3,022 | 1,848 | 26,926 | ||||
Gross profits | 19,298 | 2,565 | 1,668 | 23,531 | ||||
Profit before income tax | 4,244 | 504 | 1,467 | 6,215 | ||||
Total comprehensive income attributable to the owners of the parent | 3,398 | 539 | 1,442 | 5,379 | ||||
Financial position | ||||||||
Total assets | 27,410 | 1,014 | 530 | 28,954 | ||||
Net current assets | 17,791 | 756 | 443 | 18,990 | ||||
Revenue from external customers is attributed to the geographical segments noted above based on the customers' location. There was no customers who account for more than 10% revenue (2015: none).
30.06.2015 | ||||||||
UK | US | RoW | Total | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Income statement | ||||||||
Revenue | 18,274 | 1,860 | 1,232 | 21,366 | ||||
Gross profits | 16,676 | 1,602 | 796 | 19,074 | ||||
Profit before income tax | 3,476 | 971 | 796 | 5,243 | ||||
Total comprehensive income attributable to the owners of the parent | 2,895 | 968 | 796 | 4,656 | ||||
Financial position | ||||||||
Total assets | 21,591 | 819 | - | 22,410 | ||||
Net current assets | 12,964 | 660 | - | 13,624 | ||||
In the year ending 30 June 2016, revenue from the US has been disclosed separately as it exceeded 10% of the Group's revenue. The comparatives have thus been restated.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
4. EMPLOYEES AND DIRECTORS
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Wages and salaries | 9,667 | 7,711 | |||||
Social security costs | 1,036 | 871 | |||||
Other pension costs | 243 | 221 | |||||
10,946 | 8,803 | ||||||
The average monthly number of employees during the year is as follows | |||||||
30.6.16 | 30.6.15 | ||||||
Directors | 7 | 7 | |||||
Sales and Marketing product | 100 | 84 | |||||
Development and system engineers | 43 | 48 | |||||
Administration | 54 | 47 | |||||
204 | 186 | ||||||
During the year the Group also capitalised staff-related costs of £1,338,915 (2015: £1,549,066) in relation to internally generated development costs. | |||||||
5. NET FINANCE INCOME | |||||||
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Finance income: | |||||||
Deposit account interest | 51 | 27 | |||||
51 | 27 | ||||||
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
6. OPERATING PROFIT
Costs by nature | |||||||||||
Profit from continuing operations has been arrived after charging/(crediting):- | |||||||||||
30.6.16 | 30.6.15 | ||||||||||
£'000 | £'000 | ||||||||||
Direct marketing | 1,984 | 1,516 | |||||||||
Outsourcing | 172 | 415 | |||||||||
Other costs | 1,239 | 361 | |||||||||
Total cost of sales | 3,395 | 2,292 | |||||||||
30.6.16 | 30.6.15 | ||||||||||
£'000 | £'000 | ||||||||||
Staff related costs (inc Directors emoluments) - note 4 | 10,946 | 8,803 | |||||||||
Operating leases: Land and buildings | 865 | 834 | |||||||||
Operating lease: Other | 48 | 44 | |||||||||
Audit remuneration | 37 | 38 | |||||||||
Amortisation of intangibles | 1,330 | 1,159 | |||||||||
Depreciation charge | 450 | 397 | |||||||||
Legal, professional and consultancy fees | 289 | 417 | |||||||||
Computer expenditure | 1,236 | 828 | |||||||||
Bad debts | 801 | 103 | |||||||||
Foreign exchange (gains)/losses | (246) | 61 | |||||||||
Travelling | 471 | 351 | |||||||||
Office running | 174 | 217 | |||||||||
Other costs | 966 | 606 | |||||||||
Total administration costs | 17,367 | 13,858 | |||||||||
During the year the Group obtained the following services from the Group's auditor at costs detailed below: | |||||||||
30.6.16 | 30.6.15 | ||||||||
£'000 | £'000 | ||||||||
Fees payable to the Company's auditor for the audit of Parent Company and consolidated financial statements | 8 | 7 | |||||||
Fees payable to the Company's auditor for other services | 25 | 27 | |||||||
- audit of Company subsidiaries | |||||||||
- non-audit fees: Tax and review of interim accounts | 4 | 4 | |||||||
37 | 38 | ||||||||
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
7. INCOME TAX EXPENSE
Analysis of the tax charge from continuing operations: | |||||||||
30.6.16 | 30.6.15 | ||||||||
£'000 | £'000 | ||||||||
Current tax on profits for the year | 514 | 262 | |||||||
Deferred tax on origination and reversal of timing differences | 333 | 325 | |||||||
847 | 587 | ||||||||
Factors affecting the tax charge: | |||||||||
30.6.16 | 30.6.15 | ||||||||
£'000 | £'000 | ||||||||
Profit on ordinary activities before tax | 6,215 | 5,243 | |||||||
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20.00% (2015: 20.75%) | 1,243 | 1,088 | |||||||
Effects of: | |||||||||
Expenses not deductible | 164 | 20 | |||||||
Research and development enhanced claim | (670) | (747) | |||||||
Expenditure permitted on exercising options | (465) | (238) | |||||||
Overseas tax (profits)/losses | (15) | (46) | |||||||
Capital allowances in excess of depreciation | 257 | 185 | |||||||
Total income tax | 514 | 262 | |||||||
Deferred tax was calculated using the rate 19.75% (2015: 20%). For further details on deferred tax see note 22.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
8. PROFIT/(LOSS) OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is not presented as part of these financial statements. The parent Company's profit before exceptional items for the financial year was £4,601,353 (2015: loss £318,852).
9. DIVIDENDS
Amounts recognised as distributions to equity holders in the period | |||||||
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Final dividend for year end 30 June 2016 of 0.357p (2015: 0.2p) per share | 1,054 | 570 | |||||
Proposed dividend for the year end 30 June 2016 of 0.84p (2015: 0.36p) per share | 2,476 | 1,041 | |||||
The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The 0.84p is broken down between a general dividend of 0.43p and a special dividend of 0.41p. | |||||||
10. EARNINGS PER SHARE
Earnings per share data is based on the consolidated profit using and the weighted average number of shares in issue of the parent Company. Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.
Reconciliations are as follows:-
30.6.16 | |||||||||||||||
Weighted | |||||||||||||||
average | Per share | ||||||||||||||
From continuing operations | Earnings | number of | Amount | ||||||||||||
£'000 | shares | Pence | |||||||||||||
Basic EPS | |||||||||||||||
Profit for the year attributable to the owners of the parent | 5,368 | 293,095,257 | 1.83 | ||||||||||||
Options and warrants | - | 977,555 | - | ||||||||||||
Diluted EPS | |||||||||||||||
Profit for the year attributable to the owners of the parent | 5,368 | 294,072,812 | 1.83 | ||||||||||||
There was no difference in the weighted average number of shares used in the calculation of basic and diluted earnings per share as the effect of notionally dilutive shares were anti-dilutive. DOTDIGITAL GROUP PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 30 JUNE 2016 | |||||||||||||||
30.6.15 | ||||||||||||
Weighted | ||||||||||||
average | Per share | |||||||||||
From continuing operations | Earnings | number of | Amount | |||||||||
£'000 | shares | Pence | ||||||||||
Basic EPS | ||||||||||||
Profit for the year attributable to the owners of the parent | 4,656 | 284,804,914 | 1.63 | |||||||||
Options and Warrants | - | 5,001,766 | - | |||||||||
Diluted EPS | ||||||||||||
Profit for the year attributable to the owners of the parent | 4,656 | 289,806,680 | 1.61 | |||||||||
Weighted average number of shares
30.6.16 | 30.6.15 | ||||
Shares | Shares | ||||
Basic EPS | 293,095,257 | 284,804,914 | |||
Diluted EPS | 294,072,812 | 289,806,680 | |||
11. GOODWILL
Group | |||||
30.6.16 | 30.6.15 | ||||
COST | £'000 | £'000 | |||
At 1 July | |||||
At 30 June | 4,121 | 4,121 | |||
AMORTISATION | |||||
At 1 July | 3,512 | 3,512 | |||
Impairment | - | - | |||
At 30 June | 3,512 | 3,512 | |||
NET BOOK VALUE | 609 | 609 | |||
Goodwill arising on business combinations is not amortised but is reviewed for impairment on an annual basis, or more frequently if there are indications that goodwill may be impaired. Goodwill acquired in a business combination is allocated, at acquisition, to cash generating units (CGUs) that are expected to benefit from that business combination.
The carrying amount of goodwill relates wholly to the Group's single trading activity and business segment. This has been tested for impairment during the current financial year by comparison with the recoverable amounts of the CGU.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
11. GOODWILL continued........ |
Recoverable amounts for CGUs are based on the higher of value in use and fair value less costs to sell. The recoverable amounts of the CGU have been determined from value in use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. The key assumptions for the value in use calculations are those regarding discount rates, growth rates, and expected changes in margins. Management estimates discount rates using pre-tax rates that reflect the current market assessment of the time value of money and the risks specific to the CGUs. Changes in income and expenditure are based on past experience and expectations of the future changes in the market. The pre-tax discount rate used to calculate the value in use is 10% (2015 - 10%). The valuations indicate sufficient headroom such that a reasonably possible change in key assumptions would not result in impairment of goodwill.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
12. INTANGIBLE ASSETS
Group
Computer | Internally generated development | Domain | ||||||||||||||
software | costs | names | Totals | |||||||||||||
£'000 | £'000 | £'000 | £'000 | |||||||||||||
COST | ||||||||||||||||
At 1 July 2015 | 274 | 6,625 | 16 | 6,915 | ||||||||||||
Additions | 88 | 1,482 | - | 1,570 | ||||||||||||
At 30 June 2016 | 362 | 8,107 | 16 | 8,485 | ||||||||||||
AMORTISATION | ||||||||||||||||
At 1 July 2015 | 228 | 3,227 | 16 | 3,471 | ||||||||||||
Amortisation for the year | 36 | 1,294 | - | 1,330 | ||||||||||||
At 30 June 2016 | 264 | 4,521 | 16 | 4,801 | ||||||||||||
NET BOOK VALUE At 30 June 2016 | 98 | 3,586 | - | 3,684 | ||||||||||||
Computer | Internally generated development | Domain | ||||||||||||||
software | costs | names | Totals | |||||||||||||
£'000 | £'000 | £'000 | £'000 | |||||||||||||
COST | ||||||||||||||||
At 1 July 2014 | 274 | 5,013 | 16 | 5,303 | ||||||||||||
Additions | - | 1,612 | - | 1,612 | ||||||||||||
At 30 June 2015 | 274 | 6,625 | 16 | 6,915 | ||||||||||||
AMORTISATION | ||||||||||||||||
At 1 July 2014 | 195 | 2,102 | 15 | 2,312 | ||||||||||||
Amortisation for the year | 33 | 1,125 | 1 | 1,159 | ||||||||||||
At 30 June 2015 | 228 | 3,227 | 16 | 3,471 | ||||||||||||
NET BOOK VALUE At 30 June 2015 | 46 | 3,398 | - | 3,444 | ||||||||||||
Development cost additions represents resources the Group have invested in the development of new innovative and ground breaking technology products for marketing professionals. This platform allows them to create, send and automate marketing campaigns. Following development of the products the Group intends to licence the use of the platform.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
13. PROPERTY, PLANT AND EQUIPMENT
Group
Short | Fixtures & | Computer | ||||||||
leasehold | fittings | equipment | Totals | |||||||
£'000 | £'000 | £'000 | £'000 | |||||||
COST | ||||||||||
At 1 July 2015 | 395 | 401 | 1,354 | 2,150 | ||||||
Additions | 49 | 47 | 406 | 502 | ||||||
At 30 June 2016 | 444 | 448 | 1,760 | 2,652 | ||||||
DEPRECIATION | ||||||||||
At 1 July 2015 | 95 | 203 | 755 | 1,053 | ||||||
Depreciation for the year | 52 | 90 | 315 | 457 | ||||||
At 30 June 2016 | 147 | 293 | 1,070 | 1,510 | ||||||
NET BOOK VALUE | ||||||||||
At 30 June 2016 | 297 | 155 | 690 | 1,142 | ||||||
Short | Fixtures & | Computer | ||||||||
leasehold | fittings | equipment | Totals | |||||||
£'000 | £'000 | £'000 | £'000 | |||||||
COST | ||||||||||
At 1 July 2014 | 288 | 308 | 888 | 1,484 | ||||||
Additions | 107 | 93 | 467 | 667 | ||||||
Disposals | - | - | (1) | (1) | ||||||
At 30 June 2015 | 395 | 401 | 1,354 | 2,150 | ||||||
DEPRECIATION | ||||||||||
At 1 July 2014 | 47 | 112 | 498 | 657 | ||||||
Depreciation for the year | 48 | 91 | 258 | 397 | ||||||
Eliminated on disposal | - | - | (1) | (1) | ||||||
At 30 June 2015 | 95 | 203 | 755 | 1,053 | ||||||
NET BOOK VALUE | ||||||||||
At 30 June 2015 | 300 | 198 | 599 | 1,097 |
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
14. INVESTMENTS
Company
Shares in | Shares in | ||||
Group | Group | ||||
undertakings | undertakings | ||||
30.6.16 | 30.6.15 | ||||
COST | £'000 | £'000 | |||
At 1 July and 30 June | 8,705 | 8,705 | |||
AMORTISATION | |||||
At 1 July and 30 June | 3,519 | 3,519 | |||
NET BOOK VALUE | |||||
At 30 June | 5,186 | 5,186 | |||
The Group's or the Company's investments at the balance sheet date in the share capital of companies include the following:
Subsidiaries | Nature of business | Class of share | Proportion of | ||||
voting power | |||||||
held %: | |||||||
dotmailer Limited | Web and email-based | Ordinary | 100 | ||||
marketing | Ordinary A | 100 | |||||
dotsurvey Limited | Dormant | Ordinary | 100 | ||||
dotsearch Europe Limited | Branch company | Ordinary | 100 | ||||
dotcommerce Limited | Dormant | Ordinary | 100 | ||||
doteditor Limited | Dormant | Ordinary | 100 | ||||
dotSEO Limited | Dormant | Ordinary | 100 | ||||
dotagency Limited | Dormant | Ordinary | 100 | ||||
dotmailer Inc | Web and email- based | Ordinary | 100 | ||||
marketing | |||||||
dotmailer Pty Limited | Web and email- based | Ordinary | 100 | ||||
marketing | |||||||
All of the above subsidiaries have been included within the consolidated results
All the above companies with the exception of dotmailer Inc and dotmailer Pty Limited were incorporated in England and Wales. dotmailer Inc was incorporated in Delaware (US) and dotmailer Pty Limited was incorporated in New South Wales (Australia).
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
15. TRADE AND OTHER RECEIVABLES
Group | Company | |||||||
30.6.16 | 30.6.15 | 30.6.16 | 30.6.15 | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Current: | ||||||||
Trade receivables | 5,559 | 4,589 | - | - | ||||
Less: Provision for impairment of trade receivables | (824) | (343) | - | - | ||||
Trade receivables - net | 4,735 | 4,246 | - | - | ||||
Other receivables | 137 | 39 | - | - | ||||
Amounts owed by Group undertakings | - | - | 7,080 | 3,108 | ||||
VAT | - | - | 9 | 7 | ||||
Prepayments and accrued income | 1,334 | 1,043 | 13 | 9 | ||||
6,206 | 5,328 | 7,102 | 3,124 | |||||
Further details on the above can be found in note 21.
Included within prepayments is an amount of £271,680 (2015: £121,998) in relation to deferred commission which is considered to be long-term.
16. CASH AND CASH EQUIVALENTS
Group | Company | |||||||
30.6.16 | 30.6.15 | 30.6.16 | 30.6.15 | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Bank accounts | 17,313 | 11,932 | 639 | 166 | ||||
17,313 | 11,932 | 639 | 166 | |||||
Further details on the above can be found in note 21.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
17. CALLED UP SHARE CAPITAL
Allotted, issued, fully paid | Nominal | 30.6.16 | 30.6.15 | |||||
number | value | £'000 | £'000 | |||||
294,784,789 (2015: 287,002,065) | £0.005 | 1,473 | 1,435 | |||||
1,473 | 1,435 | |||||||
During the reporting period the Company undertook the following transactions involving the issuing and reclassifying of issued share capital:
On 17 July 2015 a number of employees exercised their share options increasing the issued share capital by 1,510,000 shares at a premium price of between 5p and 7.5p.
On 7 August 2015 a number of employees exercised their share options increasing the issued share capital by 1,200,000 shares at a premium price of between 5p and 7.5p.
On 6 November 2015 a number of employees exercised their share options increasing the issued share capital by 1,887,397 shares at a premium price of between 5p and 18.15p.
On 20 November 2015 a number of employees exercised their share options increasing the issued share capital by 1,027,397 shares at a premium price of 18.15p.
On 9 December 2015 a number of employees exercised their share options increasing the issued share capital by 1,557,930 shares at a premium price of between 5p and 7.5p.
On 6 June 2016 a number of employees exercised their share options increasing the issued share capital by 600,000 shares at a premium price of between 5p and 18.15p.
18. RESERVES
Group
Retained | Share | Reverse acquisition | ||||||
earnings | premium | reserve | ||||||
£'000 | £'000 | £'000 | ||||||
As at 1 July 2015 | 16,297 | 5,382 | (4,695) | |||||
Issue of share capital | - | 756 | - | |||||
Dividends | (1,054) | - | - | |||||
Profit for the year | 5,368 | - | - | |||||
Other comprehensive income: Currency translation | - | - | - | |||||
Share-based payment | - | - | - | |||||
Balance as at 30 June 2016 | 20,611 | 6,138 | (4,695) | |||||
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
18. | RESERVES - continued | |||||||||
Retranslation | Other | |||||||||
Reserve | reserves | Totals | ||||||||
£'000 | £'000 | £'000 | ||||||||
As at 1 July 2015 | (3) | (25) | 16,956 | |||||||
Issue of share capital | - | - | 756 | |||||||
Dividends | - | - | (1,054) | |||||||
Profit for the year | - | - | 5,368 | |||||||
Other comprehensive income: Currency translation | 11 | - | 11 | |||||||
Share-based payment | - | 199 | 199 | |||||||
Balance as at 30 June 2016 | 8 | 174 | 22,236 | |||||||
Group
Retained | Share | Reverse acquisition | |||||||||||||
earnings | premium | reserve | |||||||||||||
£'000 | £'000 | £'000 | |||||||||||||
As at 1 July 2014 | 12,211 | 5,147 | (4,695) | ||||||||||||
Issue of share capital | - | 235 | - | ||||||||||||
Share repurchase | - | - | - | ||||||||||||
Dividends | (570) | - | - | ||||||||||||
Profit for the year | 4,656 | - | - | ||||||||||||
Other comprehensive income: Currency translation | - | - | - | ||||||||||||
Share-based payment | - | - | - | ||||||||||||
Balance as at 30 June 2015 | 16,297 | 5,382 | (4,695) | ||||||||||||
Retranslation | Other | |||||||
reserve | reserves | Totals | ||||||
£'000 | £'000 | £'000 | ||||||
As at 1 July 2014 | (6) | 82 | 12,739 | |||||
Issue of share capital | - | - | 235 | |||||
Share repurchase | - | (213) | (213) | |||||
Dividends | - | - | (570) | |||||
Profit for the year | - | - | 4,656 | |||||
Currency translation | 3 | - | 3 | |||||
Share-based payment | - | 106 | 106 | |||||
Balance as at 30 June 2015 | (3) | (25) | 16,956 | |||||
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
18. | RESERVES - continued | ||||||||
Company | Share | ||||||||
Retained | Share | based | |||||||
earnings | premium | payments | Totals | ||||||
£'000 | £'000 | £'000 | £'000 | ||||||
At 1 July 2015 | 1,534 | 5,382 | (25) | 6,891 | |||||
Issue of share capital | - | 756 | - | 756 | |||||
Dividends | (1,054) | - | - | (1,054) | |||||
Profit for the year | 4,600 | - | - | 4,600 | |||||
Share-based payment | - | - | 199 | 199 | |||||
At 30 June 2016 | 5,080 | 6,138 | 174 | 11,392 | |||||
Company | |||||||||
Retained | Share | Other | |||||||
earnings | premium | Reserves | Totals | ||||||
£'000 | £'000 | £'000 | £'000 | ||||||
At 1 July 2014 | 2,423 | 5,147 | 82 | 7,652 | |||||
Issue of share capital | - | 235 | - | 235 | |||||
Share repurchase | - | - | (213) | (213) | |||||
Dividends | (570) | - | - | (570) | |||||
Loss for the year | (319) | - | - | (319) | |||||
Share-based payment | - | - | 106 | 106 | |||||
At 30 June 2015 | 1,534 | 5,382 | (25) | 6,891 | |||||
19. TRADE AND OTHER PAYABLES
Group | Company | |||||||
30.6.16 | 30.6.15 | 30.6.16 | 30.6.15 | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Current: | ||||||||
Trade payables | 1,351 | 853 | 11 | 16 | ||||
Amounts owed to Group undertakings | - | - | 4 | 4 | ||||
Social security and other taxes | 571 | 498 | - | - | ||||
Other payables | 222 | 349 | 1 | 91 | ||||
VAT | 710 | 574 | - | - | ||||
Accruals and deferred income | 1,297 | 1,163 | 46 | 39 | ||||
4,151 | 3,437 | 62 | 150 | |||||
Further details on liquidity and interest rate risk can be found in note 21.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2015
20. LEASING AGREEMENTS
Minimum lease payments under non-cancellable operating leases fall due as follows:
30.06.16 | ||||||||
Land & | ||||||||
Buildings | Others | Totals | ||||||
£'000 | £'000 | £'000 | ||||||
Within one year | 374 | 46 | 420 | |||||
Between two to five years | 1,118 | 39 | 1,157 | |||||
1,492 | 85 | 1,577 | ||||||
30.06.15 | ||||||||
Land & | ||||||||
Buildings | Others | Totals | ||||||
£'000 | £'000 | £'000 | ||||||
Within one year | 232 | 19 | 251 | |||||
Between two to five years | 1,490 | 12 | 1,502 | |||||
1,722 | 31 | 1,753 | ||||||
Operating leases represent rents payable by the Group for its office properties. Leases are negotiated for an average term of five years and rentals are fixed on an average of two years with the option to extend for a further five years at the prevailing market rate at the time.
21. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's activities expose it to a number of financial risks that include credit risk, liquidity risk, currency risk and interest rate risk. These risks and the Group's policies for managing them have been applied consistently during the year and are set out below.
The Group holds no financial or other non-financial instruments other than those utilised in the working operations of the Group and that listed in this note. It's the Group's policy not to trade in derivative contracts.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument rate risk arises, are as follows:
-Trade receivables
-Cash and cash equivalents
-Trade and other payables
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
21. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - continuedFinancial instruments by category
The following table sets out the financial instruments as at the reporting date:
Group | Company | ||||||
30.6.16 | 30.6.15 | 30.6.16 | 30.6.15 | ||||
£'000 | £'000 | £'000 | £'000 | ||||
Financial assets | |||||||
Trade and other receivables | 6,206 | 5,328 | 22 | 16 | |||
Bank balances | 17,313 | 11,932 | 639 | 166 | |||
23,519 | 17,260 | 661 | 182 | ||||
Financial liabilities | |||||||
Trade payables | 1,351 | 853 | 11 | 16 | |||
Accrued liabilities and other payables | 2,800 | 2,584 | 47 | 130 | |||
4,151 | 3,437 | 58 | 146 |
The fair value of the financial assets and financial liabilities is equal to their carrying values. All financial assets are categorised as loans and receivables and all financial liabilities are categorised as financial liabilities at amortised costs.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk management objectives and policies and whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's risk committee. The Board receives monthly reports from the Risk Committee through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company's competitiveness and flexibility. Further details regarding these policies are set out below:
Interest rate risk
The Group's interest rate risk arises from interest-bearing assets and liabilities. The Group has in place a policy of maximising finance income by ensuring that cash balances earn a market rate of interest offsetting where possible cash balances, and by forecasting and financing its working capital requirements. As at the reporting date the Group was not exposed to any movement in interest rates as it has no external borrowings and therefore is not exposed to interest rate risk. No sensitivity analysis has been prepared.
The Group's working capital requirements are managed through regular monitoring of the overall cash position and regularly updated cash flow forecasts to ensure there are sufficient funds available for its operations.
Liquidity risk
The Groups working capital requirements are managed through regular monitoring of the overall position and regularly updated cash flow forecasts to ensure there are funds available for its operations. Management forecasts indicate no new borrowing facilities will be required in the upcoming financial period.
Trade and other payables of £2,283,000 (2015: £2,365,000) are expected to mature in less than a year.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
21. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - continuedCredit risk
Credit risk arises principally from the Group's trade receivables, as there are no trade receivables within the Company, which comprise amounts due from customers. Prior to accepting new customers a credit check is obtained. As at 30 June 2016 there were no significant debts past their due period which had not been provided for. The maturity of the Group's trade receivables is as follows:
30.6.16 | 30.6.15 | |||||||||
£'000 | £'000 | |||||||||
0-30 days | 2,795 | 2,311 | ||||||||
30-60 days | 1,243 | 813 | ||||||||
More than 60 days | 1,521 | 1,465 | ||||||||
5,559 | 4,589 | |||||||||
The maturity of the Group's provision for impairment is as follows:
30.6.16 | 30.6.15 | |||||||
£'000 | £'000 | |||||||
0-30 days | 6 | 2 | ||||||
30-60 days | 87 | 2 | ||||||
More than 60 days | 731 | 339 | ||||||
824 | 343 |
The movement in the provision for the impairment is as follows:
30.06.16 | 30.6.15 | |||||||
£'000 | £'000 | |||||||
As at 1 July | 343 | 336 | ||||||
Provision for impairment | 789 | 103 | ||||||
Receivable written off in the year | (259) | (47) | ||||||
Unused amount reversed | (49) | (49) | ||||||
As at 30 June | 824 | 343 |
The Group minimises its credit risk by profiling all new customers and monitoring existing customers of the Group for changes in their initial profile. The level of trade receivables older than the average collection period consisted of a value of £1,541,197 (2015: £1,486,597) of which £730,350 (2015: £339,962) was provided for. The Group felt that the remainder would be collected post year end as they were with long-standing relationships, the risk of default is considered to be low and write-offs due to bad debts are extremely low. The Group has no significant concentration of credit risk, with the exposure spread over a large number of customers.
The credit risk on liquid funds is low as the counterparts are banks with high credit ratings assigned by international credit rating bodies. The majority of the Company's cash holdings are held at NatWest Bank which has a BBB+ credit rating.
The carrying value of both financial assets and liabilities approximates to fair value.
Capital policy
The Group's objectives when managing capital are to safeguard its ability to continue as a going concern in order to
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
21. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - continued
provide optimal returns for shareholders and to maintain an efficient capital structure to reduce the cost of capital.
In doing so the Group's strategy is to maintain a capital structure commensurate with a strong credit rating and to retain appropriate levels of liquidity headroom to ensure financial stability and flexibility. To achieve this, the Group monitors key credit metrics, risk and fixed charge cover to maintain this position. In addition the Group ensures a combination of appropriate short term and long-term liquidity headroom.
During the year the Group had a short term loan balance of £nil (2015: £nil) and amounts payable over one year are nil (2015: £nil). The Group had a strong cash reserve to utilise for any short term capital requirements that were needed by the Group.
The Group has continued to look for a further long-term investments or acquisitions and therefore, to maintain or re-align the capital structure, the Group may adjust when dividends are paid to shareholders, return capital to shareholders, issue new shares or borrow from lenders.
22. DEFERRED TAX
30.6.16 | 30.6.15 | |||||||
£'000 | £'000 | |||||||
As at 1 July | 383 | 58 | ||||||
Current year provision | 333 | 325 | ||||||
716 | 383 |
The deferred tax liability above comprises the following temporary differences:
30.6.16 | 30.6.15 | ||||||
£'000 | £'000 | ||||||
Capital allowances in excess of depreciation | 91 | 103 | |||||
R&D relief in excess of amortisation | 708 | 679 | |||||
Share option relief | (83) | (399) | |||||
716 | 383 | ||||||
Deferred tax provision relates to taxes to be levied by the same authority on the same entity expected to be settled at the same time. As such deferred tax assets and liabilities have been offset.
23. CAPITAL COMMITMENTS
The Company and Group have no capital commitments as at the year end.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
24. RELATED PARTY DISCLOSURES
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Group
The following transactions were carried out with related parties
30.6.16 | 30.6.15 | ||||||||
£'000 | £'000 | ||||||||
Sale of services | |||||||||
Redstone Connect Plc | Entity under common directorship | Email marketing services | - | 4 | |||||
Cadence Performance | Entity under common directorship | Email marketing services | 2 | 3 | |||||
2 | 7 | ||||||||
Sales of services are based on the price lists in force and at terms that would be available to third parties
30.6.16 | 30.6.15 | ||||||||
£'000 | £'000 | ||||||||
Purchase of services | |||||||||
Barratts of Old Ltd | Entity under common directorship | Consultancy services* | - | 8 | |||||
- | 8 | ||||||||
*Consultancy services to assist with the international expansion and development of channel sales strategy.
Directors
30.6.16 | 30.6.15 | |||||||
£'000 | £'000 | |||||||
Aggregate emoluments | 858 | 1,002 | ||||||
Ex-gratia payment | 137 | - | ||||||
Company contributions to money purchase pension scheme | 46 | 60 | ||||||
Share-based payments | 114 | 20 | ||||||
1,155 | 1,082 | |||||||
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
24. RELATED PARTY DISCLOSURES continued…..
Information in relation to the highest paid Director is as follows:
30.6.16 | 30.6.15 | |||||||||
£'000 | £'000 | |||||||||
Salaries | 183 | 234 | ||||||||
Ex-gratia payment | 137 | - | ||||||||
Other benefits | 3 | 11 | ||||||||
Pension costs | - | 15 | ||||||||
Share-based payments | 114 | 20 | ||||||||
437 | 280 | |||||||||
The highest paid Director did not exercise any share options in the year (2015: 660,000).
Company
The following transactions were carried out with related parties
30.06.16 | 30.06.15 | ||||||||
£'000 | £'000 | ||||||||
Year end balances arising from sales/purchase of services | |||||||||
dotmailer Limited | Subsidiary | Payables | (5,338) | (3,280) | |||||
(5,338) | (3,280) | ||||||||
The receivables and payables are unrestricted in nature and bear no interest. No provisions are held against receivables from related parties.
Loans to related parties
30.6.16 | 30.6.15 | |||||||
£'000 | £'000 | |||||||
dotmailer Limited | Subsidiary | |||||||
As at 1 July | 6,388 | 5,681 | ||||||
Loans advanced | 6,069 | 751 | ||||||
Loans repaid | (40) | (44) | ||||||
12,417 | 6,388 |
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
25. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party of the Group. dotdigital Group PLC acts as the parent Company to dotmailer Limited, , dotsearch Europe Limited, dotmailer Inc, dotmailer Pty Limited, dotagency Limited (Dormant), dotsurvey Limited (Dormant), dotSEO Limited (Dormant), dotcommerce Limited (Dormant) and doteditor Limited (Dormant).
26. SHARE-BASED PAYMENT TRANSACTIONS
The measurement requirements of IFRS 2 have been implemented in respect of share options that were granted after 7 November 2002. The expense recognised for share-based payment made during the year is £199,600 (2015: £106,000).
Vesting conditions of the options dictate that employees must remain in the employment of the Group for the whole period to qualify.
Movement in issued share options during the year
The table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options during the period. The options outstanding at 30 June 2016 had a WAEP of 26.69p (2015: 14.43p) and a weighted average contracted life of 3.2 years (2015: 2.1 years) and their exercise prices ranged from 0p to 44.50p. All share options are settled in form of equity issued.
30.06.16 | 30.6.15 | |||
No of options | WAEP | No of options | WAEP |
Outstanding at the beginning of the period | 10,938,790 | 14.83p | 13,923,790 | 8.82p | |
Granted during the year | 1,439,029 | 29.02p | 2,275,000 | 29.53p | |
Forfeited/cancelled during the period | 491,066 | 21.46p | 1,040,000 | 16.56p | |
Exchanged for shares | 7,782,724 | 10.22p | 4,220,000 | 6.06p | |
Outstanding at the end of the period | 4,104,029 | 26.69p | 10,938,790 | 14.43p | |
Exercisable at the end of the period | 1,063,409 | 8.00p | 8,462,724 | 10.44p |
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
26. SHARE-BASED PAYMENT TRANSACTIONS - continued The weighted average share price at the date of the exercise for share options exercised during the period was 40.32p (2015: 30.52p).
Expected volatility was determined by calculating the historical volatility of the Group's share price from the date it listed to the grant date of the share option. The expected life used in the model is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. *The share options issued on the 20 June 2016 were to Simone Barratt as part of her remuneration package during her time as CEO of the Group and were based on her achieving certain performance criteria. These share options were granted as an unapproved share option scheme at a £nil exercise price and were released immediately upon her being a good leaver as per the share option scheme agreed at the AGM on 15 December 2015. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
27. GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED FROM OPERATIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Group | Company | |||||||
30.6.16 | 30.6.15 | 30.6.16 | 30.6.15 | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Current: | ||||||||
Profit before tax from all operations | 6,215 | 5,243 | 4,600 | (319) | ||||
Currency revaluation | 11 | 3 | - | - | ||||
Depreciation | 1,787 | 1,556 | - | - | ||||
Loss on disposal of fixed assets | - | (1) | - | - | ||||
Share-based payments | 199 | 106 | 199 | 106 | ||||
Finance income | (51) | (27) | - | - | ||||
8,161 | 6,880 | 4,799 | (213) | |||||
(Increase)/decrease in trade receivables | (878) | (1,666) | (3,978) | 721 | ||||
Increase/(decrease) in trade payables | 714 | 453 | (88) | 76 | ||||
Cash generated from operations | 7,997 | 5,667 | 733 | 584 | ||||
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
28. GROUP CASH AND CASH EQUIVALENTS
The amounts disclosed in the statement of cash flow in respect of cash and cash equivalents are in respect of these statements of financial position amounts:
Group | Company | |||||||
£'000 | £'000 | |||||||
As at 1 July 2014 | 9,306 | 109 | ||||||
As at 30 June 2015 | 11,932 | 166 | ||||||
As at 30 June 2016 | 17,313 | 639 | ||||||
29. PROJECT DEVELOPMENT
During the period the Group incurred £1,482,558 (2015: £1,611,929) in development investments. All resources utilised in development have been capitalised as outlined in the accounting policy governing this area.
30. POST BALANCE SHEET EVENTS
There are no post balance sheet events which impact the Group's financial statements.
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ENDFR FFFFAWFMSESSdotDigital Group plc published this content on 18 October 2016 and is solely responsible for the information contained herein.
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