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THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
25 February 2020
dotdigital Group plc
('dotdigital', 'the Company' or 'the Group')
Interim Results for the six months ended 31 December 2019
dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, announces its Half Year results for the six months ended 31 December 2019 ('H1 2020').
Financial Highlights:
· Revenue from Continuing Operations grew 15% to £23.1m (H1 2019: £20.1m)
o Functionality revenue (which includes licence fees and bolt-on functionality) from additional services grew 32% to £7.4m (H1 2019: £5.7m)
o c90% of revenue from Continuing Operations is recurring
· Adjusted EBITDA1 from Continuing Operations grew 39% to £9.3m (H1 2019: £6.7m)
o Adjusted EBITDA margin from Continuing Operations grew to 40% in the period
· Cash balance at period end of £22.6m (H1 2019: £16.7m)
· Restructure of the Comapi business now complete and Discontinued Operations (comprising the legacy, non-core SMS division) were breakeven through the period
Operational Highlights:
· Another half year of continued strong delivery against strategic pillars: geographic expansion, partnership development and product innovation
Geographic expansion
· Organic international revenue up by 33% to £7.9m (H1 2019: £6.0m), with international sales now representing 34% of total sales (excluding Discontinued Operations2 (H1 2019: 30%))
· EMEA region continued double digit growth at 11% to £17.7m (H1 2019: £15.9m)
· North America revenue grew organically 18% to $5.1m (H1 2019: $4.3m) driven by acquisition of higher value customers and growth of existing customers
o Continued investment in region with appointment of regional General Manager post period end to capitalise on the market opportunity
· APAC sales, channel team expansion and Asia presence drove revenue from the region, which grew organically 51% to AUS$2.5m (H1 2019: AUS$1.6m) following investment in the region in the prior year
Strategic partnerships
· Growing pipeline and enhanced value proposition for connectors into both ecommerce platforms and CRM (Customer Relationship Management) software
· Sales through connectors into strategic partners increased 4% to £10.7m (H1 2019: £10.3m), impacted by ramp up times of new staff. Magento (an Adobe company) connector revenues grew 16% in the reported period.
· We added to our Magento integration with Engagement Cloud live chat now bundled into their core code base
· Continued investment in new hires in all regions with increased focus on building strategic partnerships
Product innovation
· Investment in product R&D totalled £2.9m during the period (H1 2019: £2.6m) underpinning management's commitment to continuous innovation
· Enhanced AI capabilities in period including launch of sector-tailored product package for commerce customers and enhanced product recommendations capabilities
· Improved end user experience interface, driving better return on investments for our customers
· Further channel functionality added to Engagement Cloud, including a new chat solution and additional SMS capabilities
Milan Patel, CEO of dotdigital, commented: 'We are delighted to report a strong first half year performance, and we are proud of the achievements we have made against the growth strategy. The Group has once again delivered double-digit organic growth and positive progress against all strategic objectives, demonstrating the momentum we are experiencing with the growing global adoption of our software and services offering.
'The 'martech' industry is fast-paced and growing, and all of us at dotdigital are excited by the opportunities ahead. We enter the second half of the year in a strong position operationally and with healthy trading, giving the Board confidence in a successful outcome for the year and sustained future growth.'
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For further information please contact:
dotdigital Group Plc | Tel: 020 3953 3072 InvestorRelations@dotdigital.com |
Alma PR (Financial PR) Hilary Buchanan Josh Royston David Ison | Tel: 020 3405 0210 dotdigital@almapr.co.uk |
Canaccord Genuity (Nominated Advisor and Joint Broker) Georgina McCooke Jonathan Barr, Sales | Tel: 020 7523 8000 |
finnCap (Joint Broker) | Tel: 020 7496 3000 |
N+1 Singer (Joint Broker) Alex Bond, Corporate Finance | Tel: 020 7220 0500 |
About dotdigital
dotdigital Group plc's (AIM: DOTD) SaaS omnichannel marketing automation platform, Engagement Cloud, makes it easy for brands to carry out sophisticated, customer data-driven digital marketing campaigns across channels including email, SMS, social, ads, mobile, web and offline.
The platform is currently used by more than 65,000 marketers across more than 110 countries in eight languages, with over 19 billion messages sent in 2019.
Founded in 1999, dotdigital is headquartered in London with offices in Amsterdam, Croydon, Manchester, Cheltenham, New York, Los Angeles, Melbourne, Sydney, Singapore, Cape Town, Minsk and Warsaw.
Operational Review
Introduction
This has been a period of strong trading and operational progress for the Group, delivering double digit organic growth and positive momentum against all pillars of our growth strategy. A significant amount of work has gone into strengthening the foundations of the business over a number of years and we are seeing the benefits of this reflected in the widening adoption globally of our omnichannel marketing technology platform, Engagement Cloud.
The Group delivered organic revenue growth from Continuing Operations of 15% to £23.1m (H1 2019: £20.1m) and adjusted EBITDA growth of 39% to £9.3m. Our recurring revenues derived from enhanced product functionality grew by 32% to £7.4m (H1 2019: £5.7m), an important indicator of the value created by our focussed R&D programme. The Group is cash generative and maintains a strong balance sheet with no debt and net cash balances of £22.6m at period end (H1 2019: £16.7m).
Following the acquisition of Comapi in November 2017, its omnichannel technology has been fully integrated into the Group's Engagement Cloud platform, significantly enhancing its functionality and value proposition. The restructure of the Comapi business is now complete and the Discontinued Operations (comprising the legacy, non-core SMS division) were breakeven through the period. The Board has clarity over the continued wind down of this division and expects to conclude its reporting on Discontinued Operations by financial year end June 2021.
We continue to invest in our international markets, product innovation and strengthening our partner relationships in line with the substantial market opportunity, whilst maintaining strong margin. Our 'software-as-a-service' (SaaS) model provides a high-quality and highly visible revenue stream with repeatable characteristics that underpins our future growth plans.
Market
Technology advancements have fundamentally changed how people expect to interact with brands, and these businesses must adapt their marketing efforts accordingly in order to stay ahead of the competition. With this comes increased complexity for businesses across all industries striving to attract and retain consumers through effective and efficient digital engagement across all customer touch points. As a result, there is a real and global requirement for enterprise and mid-market technologies that can enable meaningful marketing campaigns in the new digital age. According to Forrester, global marketing automation spend is predicted to grow to US$25.1bn by 2027 from US$3.8bn today.
dotdigital's specialised focus is in facilitating data-driven, timely and flexible marketing communication through the provision of technology and services, ultimately driving better consumer acquisition, retention and brand loyalty. We seek to empower marketers (our customers) to reach their customers in ways that engage them on their own terms, in a personalised and relevant manner, and through the channel of the consumer's choice.
The competitive landscape is characterised by a range of diverse providers from small business vendors to large cloud enterprise software providers. Our platform's ease of use, technical expertise service layer and available graduation pathway to more sophisticated tools make the platform applicable to small businesses, whilst the breadth of functionality, platform extensibility and speed of deployment make it equally in demand by large enterprises. Given the breadth of opportunities our primary area of focus is in the mid-market, however we do play across all tiers which is reflected in our customer base. Engagement Cloud is unique in that it can integrate into any of our customers' data sources (CRM and ecommerce platforms), is available in 8 languages, on a 'per user' basis within an organisation and is sector agnostic. The value placed on our products and services by our customers is evidenced by our high renewal rates, and the relationships we have with a range of industry-leading ecommerce and CRM providers indicate the level of trust and endorsement that the wider marketing technology industry has in our solution.
Strategy
The Group's clear growth strategy places organic growth at its core, centred around three strategic pillars: international diversification; expanded market reach through partnership relationships; and continuous product innovation. In addition to the organic growth strategy, we continue to assess the market for strategic acquisitions, based around three criteria: 1) complementary synergy technologies; 2) product functionality that accelerates go-to-market; and 3) customer base or talent acquisition that helps strengthen our foundations.
Geographic Expansion
As we invest in international markets, our Engagement Cloud platform continues to be well received globally. Organic international revenue was up by 33% to £7.9m (H1 2019: £6.0m), with international sales now representing 34% of total sales (excluding Discontinued Operations) (H1 2019: 30%), in line with our strategy to grow our global operations. We will continue to build on our global footprint, currently spanning 14 offices worldwide, and we believe we are well placed to benefit from these investments.
EMEA
Our EMEA business grew 11% in the period to £17.7m (H1 2019: 15.9m), driven by sustained execution of our strategy and the implementation of efficiency measures in previous periods now bearing fruit. The move to a general manager structure across all business units has created more management bandwidth, and the opening of our Netherlands office and investment in people in region has resulted in strong product up-take and servicing of our existing clients.
With the dust now settled on the implementation of GDPR, the use of data has become paramount to our customers' marketing strategies, with a greater focus on relevancy. We have built into our platform functionality around these requirements to put more control in the hands of end users. As a result, we have seen email and messaging volumes return to normalised levels, over 30% growth compared to the corresponding month in the prior year.
North America
Revenues in North America grew 18% to US$5.1m (H1 2019: $4.3m), driven by both the acquisition of higher value customers and increased revenue per existing customer. We have further invested in the region as we expand our presence, including the appointment of Mike Weiss, General Manager of North America, post period end. Mike joins us from Magento where he held the position of SVP of North America of Magento sales. The investment we have made in marketing and people has helped develop further brand awareness and strengthened the foundations from which to scale. We are encouraged by our progress in this region which represents a significant growth opportunity for the Group.
APAC
Sales in the APAC region grew 51% to AUS$2.5m, (H1 2019: AUS$1.6m). Our expanded presence in the region, including customer support personnel and the opening of our Singapore office, combined with strengthening relationships with strategic partners and System Integrators (SI), drove brand awareness. Albeit early, customer successes we have had in the region have resulted in growing market confidence in our offering and we are seeing increased referrals through our partner network as a result.
Partnerships
The Group continues to broaden and deepen its partnership relationships, amplifying the Group's market reach beyond its direct sales channel. Sales originating through strategic partner referrals increased 4% to £10.7m (H1 2019: £10.3m). This was impacted by the ramp up times of new channel partner staff within the Group, where typical ramp up is 3-6 months.
A strategic technology partner for the Group is defined as a partner where our customer using that technology integration, has the potential to represent or accounts for 10% of Group revenue. This strategic partnership model is complemented by a broader general partner referral network which includes 232 active global partners. A core focus of the strategic partnership network is forging connectors into both ecommerce and CRM platforms, with the aim of building brand awareness as we push out into international markets.
Our strategic partnership with Magento (an Adobe company) continues to strengthen, with our Engagement Cloud live chat product recentlybundled into the core code base of the latest version of their ecommerce platform and therefore made available as the default option. Our move into omnichannel through the Comapi acquisition has enabled this increased integration. Revenues via our Magento connector increased 16% in the period. Furthermore, post period end we were awarded Adobe Premier Partner status, a prestigious endorsement of our market proposition.
Our connector into our strategic partnership with Shopify was impacted as a result of increased competitive pressure at the small business end of the market. Based on our learnings, we introduced a rolling 30-day contracted model in January to have a comparative pricing structure for this segment.
Our focus in the period ahead continues towards strengthening and building both ecommerce and CRM partners and we will increase investment in our relationships both from a people and R&D perspective to enhance our value proposition, in line with our planning at the start of the year.
Product Innovation
Product innovation is integral to the business and we remain committed to ensuring our platform is at the forefront of the market. The benefit of previous years' investments is demonstrated in the monetisation of new enhanced features, which in the period saw functionality revenues grow by 32% to £7.4m (H1 2019: £5.7m), adding to the recurring revenue base of the Continuing Operations, (now c.90% of revenue). This demonstrates the value that can be derived not only through our messaging function, but through the creation of new revenue streams through enhanced functionality and data.
During the period we invested £2.9m in R&D underpinning management's commitment to continuous product innovation. The focus for product innovation is in the key areas of:
- Data and intelligence - joining all data together to create a single customer view and help our customers target their campaigns better from a personalisation perspective.
- Marketing automation - harnessing artificial intelligence and machine learning across targeted parts of the platform's architecture, informed by our customers' needs and requirements.
- Building out further omni-channel functionality to Engagement Cloud to assist businesses through the full customer journey at every touch point. This included the launch of a new chat solution and additional SMS capabilities.
During the period we launched our Commerce Intelligence product offering, a packaged suite of solutions targeted to the specific needs of our commerce customers and made further enhancements to our AI powered product recommendations capabilities.
We also released an improved end user experience interface with new online landing pages and forms feature, including easy access to our product recommendations and consent management capabilities, driving better return on investments for our customers.
People
Our people are at the heart of the business. Our customers value our business not only because of our great technology but because of the expertise of our people who bring the technology to life, providing the right ingredients that make our customers more successful. The culture at dotdigital is centred around empowering all employees to make decisions which lends to our agile structure and sets us apart. We trust and value all of our employees and thank them for their tireless effort and passion in progressing the Group's vision.
FINANCIAL REVIEW
Revenue
Revenue from Continuing Operations during the period grew 15% to £23.1m from £20.1m in H1 2019, in line with management expectations. This performance was driven primarily by new customer wins and existing customer growth.
Recurring revenue represents c.90% of Continuing Operations revenues, improving visibility on future revenues. Enhanced functionality revenue (which includes licence fees and bolt-on functionality), grew 32% to £7.4m from £5.7m in H1 2019.
The geographic split of revenues continued to diversify, with international sales now representing 34% of total sales (excluding Discontinued Operations) in the period, up from 30% in H1 2019. Of that, revenues were up 18% in the US to $5.1m (H1 2019: $4.3m), and up 51% in APAC to AUS$2.5m (H1 2019: AUS$1.6m). EMEA revenues grew 11% in the period to £17.7m (H1 2019: £15.9m).
During the period ARPU3 increased by 14% to £999 per month (H1 2019: £876 per month).
EBITDA
We achieved an Adjusted EBITDA margin from Continuing Operations of 40%, with Adjusted EBITDA from Continuing Operations growing 39% to £9.3m from £6.7m in H1 2019, which was in line with management expectations. The adjustments include a share-based payment charge of £0.34m and exceptional costs of £0.07m.
Balance Sheet & Cash Position
dotdigital continues to generate strong cash flow from its Engagement Cloud operations with an interim period end net cash balance of £22.6m.
The Group continues to prioritise product development and during the period spent £2.9m on development (compared to £2.6m in H1 2019). The Group continues to maintain a strong balance sheet with net assets of £47.5m and zero debt.
Dividend Policy
A dividend of 0.67p per ordinary share (2019: 0.64p) was proposed by the Company at the time of its Final Results in October last year, demonstrating a commitment from the Board to deliver value by focusing on total shareholder return. This dividend was approved by shareholders at the Annual General Meeting on 17 December 2019 and paid on 31 January 2020.
The Group will continue to conduct a full dividend review at year end; therefore in line with previous years the Board is not proposing an interim dividend.
Outlook
The results and strategic progress achieved in the first half demonstrate the strength of the business foundations that have been established. We are a truly global business with a sophisticated platform that creates customer journeys at every touch point.
Expenditure on 'martech' has seen year-on-year growth of 22%, with a combined value of $65.9bn for the UK and North America alone in 20194. With the trend expected to continue, we believe we have the right platform in place from which to scale and a clear strategy that is focused on generating results. The Board is confident in a successful outcome for the year in line with market expectations and sustained future growth.
1 Consensus adjusted EBITDA for continuing operations as at 21 January 2020, for the year ending 30 June 2020, is approx. £17.0 million. EBITDA means earnings before interest, tax, depreciation, amortisation, and before restructuring, other non-recurring costs and certain non-cash items.
2Following the acquisition Comapi in Nov 2017 and integration of its omnichannel technology platform into the dotdigital Engagement Cloud, the Group discontinued the legacy, non-core SMS division in May 2019
3 ARPU means average revenue per user/customer
4'Martech: 2020 and Beyond' WARC in collaboration with BDO and University of Bristol, October 2019
Consolidated Income Statement | |||||||
For the six months ended 31 December 2019 | |||||||
Restated | |||||||
6 months | 6 months | 12 months | |||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | |||||
Unaudited | Unaudited | Audited | |||||
Note | £'000s | £'000s | £'000s | ||||
Continuing operations | |||||||
Revenue | 4 | 23,072 | 20,146 | 42,522 | |||
Cost of sales | (2,461) | (2,350) | (4,377) | ||||
Gross profit | 4 | 20,611 | 17,796 | 38,145 | |||
Administrative expenses | (13,642) | (12,553) | (26,380) | ||||
Share based payments | (341) | (450) | (565) | ||||
Exceptional costs | (67) | (111) | (179) | ||||
Operating profit from continuing operations | 6,561 | 4,682 | 11,021 | ||||
Finance income | 16 | 10 | 19 | ||||
Finance costs | (48) | - | - | ||||
Profit before income tax from continuing operations | 6,529 | 4,692 | 11,040 | ||||
Income tax expense | (842) | (670) | (58) | ||||
Profit for the period from continuing operations | 5,687 | 4,022 | 10,982 | ||||
Discontinuing operations | |||||||
(Loss)/Profit for the year from discontinued operations | (175) | 258 | (2,457) | ||||
Profit for the period attributable to the owners of the Company | 5,512 | 4,280 | 8,525 | ||||
Earnings per share from all operations (pence per share) | |||||||
Basic | 6 | 1.84 | 1.44 | 2.86 | |||
Diluted | 6 | 1.84 | 1.42 | 2.82 | |||
Adjusted basic | 6 | 2.00 | 1.65 | 3.36 | |||
Adjusted diluted | 6 | 1.99 | 1.63 | 3.31 | |||
Consolidated Statement of Comprehensive Income | |||||||
For the six months ended 31 December 2019 | |||||||
Restated | |||||||
6 months to 31 Dec 2019 | 6 months to 31 Dec 2018 | 12 months to 30 June 2019 | |||||
Unaudited | Unaudited | Audited | |||||
Note | £'000s | £'000s | £'000s | ||||
Earnings per share from continuing operations (pence per share) | |||||||
Basic | 6 | 1.90 | 1.35 | 3.68 | |||
Diluted | 6 | 1.89 | 1.33 | 3.63 | |||
Adjusted basic | 6 | 2.03 | 1.54 | 3.93 | |||
Adjusted diluted | 6 | 2.03 | 1.52 | 3.88 | |||
Earnings per share from discontinued operations (pence per share) | |||||||
Basic | 6 | (0.06) | 0.09 | (0.82) | |||
Diluted | 6 | (0.06) | 1.09 | (0.81) | |||
Adjusted basic | 6 | (0.04) | 0.11 | (0.57) | |||
Adjusted diluted | 6 | (0.04) | 0.11 | (0.57) |
Consolidated Statement of Comprehensive Income | |||||||
For the six months ended 31 December 2019 | |||||||
Restated | |||||||
6 months | 6 months | 12 months | |||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | |||||
Unaudited | Unaudited | Audited | |||||
note | £'000s | £'000s | £'000s | ||||
Profit for the period | 5,512 | 4,280 | 8,525 | ||||
Other comprehensive income | |||||||
Items that may be subsequently reclassified to | |||||||
profit and loss: | |||||||
Exchange differences on translating foreign operations | (133) | (25) | (42) | ||||
Total comprehensive income attributable to: | |||||||
Owners of the parent | 4 | 5,379 | 4,255 | 8,483 | |||
Total comprehensive income for the year | |||||||
Comprehensive income from continuing operations | 5,554 | 3,997 | 10,940 | ||||
Comprehensive income from discontinued operations | (175) | 258 | (2,457) |
Consolidated Statement of Financial Position For the six months ended 31 December 2019 | ||||||||
Note | As at | As at | As at | |||||
31 Dec 2019 | 31 Dec 2018 | 30 June 2019 | ||||||
Unaudited | Unaudited | Audited | ||||||
£'000s | £'000s | £'000s | ||||||
Assets | ||||||||
Non-current assets | ||||||||
Goodwill | 9,680 | 9,680 | 9,680 | |||||
Intangible assets | 12,721 | 10,790 | 11,702 | |||||
Property, plant and equipment | 1,001 | 1,035 | 1,037 | |||||
Right-of-use assets | 5,274 | - | - | |||||
28,676 | 21,505 | 22,419 | ||||||
Current assets | ||||||||
Trade and other receivables | 13,306 | 12,411 | 12,222 | |||||
Cash and cash equivalents | 22,559 | 16,677 | 19,320 | |||||
35,865 | 29,088 | 31,542 | ||||||
Total assets | 4 | 64,541 | 50,593 | 53,961 | ||||
Equity attributable to the owners of the parent | ||||||||
Called up share capital | 8 | 1,493 | 1,490 | 1,490 | ||||
Share premium | 6,967 | 6,791 | 6,791 | |||||
Reverse acquisition reserve | (4,695) | (4,695) | (4,695) | |||||
Other reserves | 1,031 | 1,111 | 720 | |||||
Retranslation reserve | (117) | (51) | 16 | |||||
Retained earnings | 42,781 | 33,775 | 37,161 | |||||
Total equity | 47,460 | 38,421 | 41,483 | |||||
Consolidated Statement of Financial Position | ||||||
For the six months ended 31 December 2019 | ||||||
As at | As at | As at | ||||
31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | ||||
Unaudited | Unaudited | Audited | ||||
note | £'000s | £'000s | £'000s | |||
Liabilities | ||||||
Non-current liabilities | ||||||
Lease liabilities | 4,258 | - | - | |||
Deferred tax | 1,852 | 1,924 | 1,377 | |||
6,110 | 1,924 | 1,377 | ||||
Current liabilities | ||||||
Trade and other payables | 9,867 | 10,248 | 11,096 | |||
Lease liabilities | 1,081 | - | - | |||
Financial liabilities - interest bearing loans | - | - | 5 | |||
Current tax payable | 23 | - | - | |||
10,971 | 10,248 | 11,101 | ||||
Total liabilities | 17,081 | 12,172 | 12,478 | |||
Total equity and liabilities | 64,541 | 50,593 | 53,961 |
Consolidated Statement of Changes in Equity For the six months ended 31 December 2019 | ||||||||||||||||||||||||
Share | Share | Retained | Other | Reverse | Re-translation | |||||||||||||||||||
capital | premium | Earnings | reserves | Acquisition reserve | Reserve | Total | ||||||||||||||||||
£'000s | £'000s | £'000s | £'000s | £'000s | £'000s | £'000s | ||||||||||||||||||
As at 1 July 2018 | 1,490 | 6,791 | 32,331 | 661 | (4,695) | (26) | 36,552 | |||||||||||||||||
Profit for the period | - | - | 4,280 | - | - | - | 4,280 | |||||||||||||||||
Retranslation reserve | - | - | - | - | - | (25) | (25) | |||||||||||||||||
IFRS 15 restatement | - | - | (2,836) | - | - | - | (2,836) | |||||||||||||||||
Share based payments | - | - | - | 450 | - | - | 450 | |||||||||||||||||
As at 31 December 2018 | 1,490 | 6,791 | 33,775 | 1,111 | (4,695) | (51) | 38,421 | |||||||||||||||||
As at 1 January 2019 | 1,490 | 6,791 | 33,775 | 1,111 | (4,695) | (51) | 38,421 | |||||||||||||||||
Profit for the period | - | - | 4,244 | - | - | - | 4,244 | |||||||||||||||||
Dividends | - | - | (1,903) | - | - | - | (1,903) | |||||||||||||||||
Issue of share capital | - | - | - | - | - | - | - | |||||||||||||||||
Reserve transfer | - | - | 506 | (506) | - | - | - | |||||||||||||||||
Deferred tax asset on IFRS 15 | - | - | 539 | - | - | - | 539 | |||||||||||||||||
Retranslation reserve | - | - | - | - | - | 67 | 67 | |||||||||||||||||
Share based payments | - | - | - | 115 | - | - | 115 | |||||||||||||||||
As at 30 June 2019 | 1,490 | 6,791 | 37,161 | 720 | (4,695) | 16 | 41,483 | |||||||||||||||||
As at 1 July 2019 | 1,490 | 6,791 | 37,161 | 720 | (4,695) | 16 | 41,483 | |||||||||||||||||
Profit for the period | - | - | 5,512 | - | - | - | 5,512 | |||||||||||||||||
Retranslation reserve | - | - | - | - | - | (133) | (133) | |||||||||||||||||
Issue of share capital | 3 | 176 | - | - | - | - | 179 | |||||||||||||||||
IFRS 16 restatement (note 9) | - | - | 78 | - | - | - | 78 | |||||||||||||||||
Reserve transfer | - | - | 30 | (30) | - | - | - | |||||||||||||||||
Share based payments | - | - | - | 341 | - | - | 341 | |||||||||||||||||
As at 31 December 2019 | 1,493 | 6,967 | 42,781 | 1,031 | (4,695) | (117) | 47,460 | |||||||||||||||||
Consolidated Statement of Changes in Equity |
For the six months ended 31 December 2019 |
-Share capital is the amount subscribed for shares at nominal value.
- Share premium represents the excess of the amount subscribed for Share Capital over the nominal value net of the share issue expenses.
- Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
- The reverse acquisition reserve relates to the adjustment required to account the reverse acquisition in accordance with International Financial Reporting Standards.
- Other reserves relate to the charge for the share-based payments in accordance with International Financial Reporting Standard 2.
- Retranslation reserve relates to the retranslation of a foreign subsidiary into the functional currency of the Group.
Consolidated Statement of Cash Flows | |||||||
For the six months ended 31 December 2019 | |||||||
6 months | 6 months | 12 months | |||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | |||||
Unaudited | Unaudited | Audited | |||||
note | £'000s | £'000s | £'000s | ||||
Cash flow from operating activities | 7 | 6,650 | 4,778 | 12,493 | |||
Tax paid | (74) | (308) | (207) | ||||
Net cash generated from operating activities | 6,576 | 4,470 | 12,286 | ||||
Net cash generated from continuing operating activities | 6,112 | 3,403 | 13,288 | ||||
Net cash generated from discontinuing operating activities | 464 | 1,067 | (1,002) | ||||
Cash flow from investing activities | |||||||
Purchase of intangible fixed assets | (2,835) | (2,597) | (5,617) | ||||
Purchase of tangible fixed assets | (168) | (206) | (456) | ||||
Sales of tangible fixed assets | 3 | - | - | ||||
Interest received | 16 | 10 | 19 | ||||
Net cash used in investing activities | (2,984) | (2,793) | (6,054) | ||||
Net cash used in continuing investing activities | (2,981) | (2,260) | (5,168) | ||||
Net cash used in discontinuing investing activities | (3) | (533) | (886) | ||||
Cash flows from financing activities | |||||||
Equity dividends paid | - | - | (1,903) | ||||
Repayment of leasing liabilities | (527) | - | - | ||||
Loan repayment in relation to acquisition | (5) | (5) | (14) | ||||
Share issue | 179 | - | - | ||||
Net cash used in financing activities | (353) | (5) | (1,917) | ||||
Net cash used in continuing financing activities | (303) | - | (1,903) | ||||
Net cash used in discontinuing financing activities | (50) | (5) | (14) | ||||
Increase in cash and cash equivalents | 3,239 | 1,672 | 4,315 | ||||
Cash and cash equivalents at beginning of period | 19,320 | 15,005 | 15,005 | ||||
Cash and cash equivalents at end of period. | 22,559 | 16,677 | 19,320 | ||||
The above does not include the effect of foreign exchange rate changes on cash and cash equivalents due to the immaterial nature.
Notes to interim financial statements | |||||||||||||
For the six months ended 31 December 2019 | |||||||||||||
1. GENERAL INFORMATION | |||||||||||||
Dotdigital Group Plc is a company incorporated in England and Wales and quoted on the AIM market. | |||||||||||||
2. BASIS OF INFORMATION | |||||||||||||
These consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union and on a historical basis, using the accounting policies which are consistent with those set out in the Group's annual report and accounts for the year ended 30 June 2019. The interim financial information for the six months to 31 December 2019, which complies with IAS 34 'Interim Financial Reporting' has been approved by the Board of Directors on 25 February 2020. | |||||||||||||
The unaudited interim financial information for the period ended 31 December 2019 does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 30 June 2019 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and contain an unqualified audit report and did not contain statements under Section 498 to 502 of the Companies Act 2006. | |||||||||||||
3. SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2019, as described in those financial statements with the exception of the adoption of the new accounting standard IFRS 16 leases, see note 9. | |||||||||||||
Notes to interim financial statements For the six months ended 31 December 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4. SEGMENTAL REPORTING | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Group's single line of business is the provision of data-driven omnichannel marketing automation. The chief operating decision maker considers the Group's reportable segments to be by geographical location this being EMEA, US and APAC operations and by business activity, this being core Engagement Cloud and CPaaS as shown below: Geographical revenue and results
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to interim financial statements For the six months ended 31 December 2019 | |||||||
4. SEGMENTAL REPORTING (CONTINUED…) | |||||||
12 months to 30 June 2019 | ||||||||
EMEA | US | APAC | ||||||
Operations | Operations | Operations | Total | |||||
£'000s | £'000s | £'000s | £'000s | |||||
Income statement | ||||||||
Revenue | 42,215 | 6,957 | 2,113 | 51,285 | ||||
Gross profit | 32,039 | 6,099 | 1,926 | 40,064 | ||||
Profit before income tax | 5,672 | 2,812 | 389 | 8,873 | ||||
Total comprehensive income | ||||||||
attributable to the owners of the parent | 5,441 | 2,657 | 385 | 8,483 | ||||
Financial position | ||||||||
Total assets | 52,100 | 1,717 | 144 | 53,961 | ||||
Net current assets | 16,771 | 2,938 | 732 | 20,441 |
Business activity revenue and results
6 months to 31 December 2019 | ||||||
Core | CPaaS | Total | ||||
£'000s | £'000s | £'000s | ||||
Income statement | ||||||
Revenue | 23,072 | 4,005 | 27,077 | |||
Gross profit | 20,611 | 1,081 | 21,692 | |||
Profit before income tax | 6,529 | (56) | 6,473 | |||
Total comprehensive income attributable to the owners of the parent | 5,554 | (175) | 5,379 | |||
Financial position | ||||||
Total assets | 61,296 | 3,245 | 64,541 | |||
Net current assets | 25,399 | (505) | 24,894 | |||
Notes to interim financial statements | |
For the six months ended 31 December 2019 |
4. SEGMENTAL REPORTING (CONTINUED…)
6 months to 31 December 2018 | |||||
Core | CPaaS | Total | |||
£'000s | £'000s | £'000s | |||
Income statement | |||||
Revenue | 20,146 | 4,755 | 24,901 | ||
Gross profit | 17,796 | 1,383 | 19,179 | ||
Profit before income tax | 4,692 | 245 | 4,937 | ||
Total comprehensive income attributable to the owners of the parent | 4,012 | 243 | 4,255 | ||
Financial position | |||||
Total assets | 46,375 | 4,218 | 50,593 | ||
Net current assets | 19,167 | (327) | 18,840 |
12 months to 30 June 2019 | |||||
Core | CPaaS | Total | |||
£'000s | £'000s | £'000s | |||
Income statement | |||||
Revenue | 42,522 | 8,763 | 51,285 | ||
Gross profit | 38,145 | 1,919 | 40,064 | ||
Profit before income tax | 11,040 | (2,167) | 8,873 | ||
Total comprehensive income attributable to the owners of the parent | 10,940 | (2,457) | 8,483 | ||
Financial position | |||||
Total assets | 52,263 | 1,698 | 53,961 | ||
Net current assets | 21,177 | (736) | 20,441 |
5. DIVIDENDS
The proposed final dividend of £1,995,846 for the year ended 30 June 2019 of 0.67p per share was paid on the 31 January 2020.
Notes to interim financial statements | |
For the six months ended 31 December 2019 |
6. EARNINGS PER SHARE
Earnings per share data is based on the consolidated profit using 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. Adjusted earnings per share is based on the consolidated profit deducting the acquisition related exceptional costs and share-based payment.
A number of non-IFRS adjusted profit measures are used in this annual report and financial statements. Adjusting items are excluded from our headline performance measures by virtue of their size and nature, in order to reflect management's view of the performance of the Group. Summarised below is a reconciliation between statutory results to adjusted results. The Group believes that alternative performance measures such as adjusted EBITDA are commonly reported by companies in the markets in which it competes and are widely used by investors in comparing performance on a consistent basis without regard to factors such as depreciation and amortisation, which can vary significantly depending upon accounting methods (particularly when acquisitions have occurred), or based on factors which do not reflect the underlying performance of the business. The adjusted profit after tax earnings measure is also used for the purpose of calculating adjusted earnings per share.
Reconciliations to earnings figures used in arriving at adjusted earnings per share are as follows:
6 months to December 2019 | 6 months to December 2018 | 12 months to June 2019 | |||
From all operations | £'000s | £'000s | £'000s | ||
Profit for the year attributable to the owners of the parent | 5,512 | 4,280 | 8,525 | ||
Impairment of acquisition-related intangible fixed asset | - | - | 344 | ||
Amortisation of acquisition-related intangible fixed asset | 124 | 127 | 522 | ||
Other exceptional costs | 7 | 51 | 59 | ||
Share-based payment | 341 | 450 | 565 | ||
Adjusted profit for the year attributable to the owners of the parent | 5,984 | 4,908 | 10,015 | ||
Adjusted profit for the year attributable to the owners of the parent from: | |||||
Continuing operations: | 6,095 | 4,583 | 11,726 | ||
Discontinuing operations: | (111) | 325 | (1,711) |
Management does not consider the above adjustments to reflect the underlying business performance.
The other exceptional costs relate to one-off acquisition costs of Comapi.
Notes to interim financial statements | ||||||||||||
For the six months ended 31 December 2019 | ||||||||||||
6. EARNINGS PER SHARE (CONTINUED…) | ||||||||||||
6 months | 6 months | 12 months | ||||||||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | ||||||||||
Unaudited | Unaudited | Audited | ||||||||||
All operations | ||||||||||||
Earnings per Ordinary share: | ||||||||||||
Basic (pence) | 1.84 | 1.44 | 2.86 | |||||||||
Diluted (pence) | 1.84 | 1.42 | 2.82 | |||||||||
Adjusted basic (pence) | 2.00 | 1.65 | 3.36 | |||||||||
Adjusted diluted (pence) | 1.99 | 1.63 | 3.31 | |||||||||
Continuing operations | ||||||||||||
Earnings per Ordinary share: | ||||||||||||
Basic (pence) | 1.90 | 1.35 | 3.68 | |||||||||
Diluted (pence) | 1.89 | 1.33 | 3.63 | |||||||||
Adjusted basic (pence) | 2.03 | 1.54 | 3.93 | |||||||||
Adjusted diluted (pence) | 2.03 | 1.52 | 3.88 | |||||||||
Discontinued operations | ||||||||||||
Earnings per Ordinary share: | ||||||||||||
Basic (pence) | (0.06) | 0.09 | (0.82) | |||||||||
Diluted (pence) | (0.06) | 0.09 | (0.81) | |||||||||
Adjusted basic (pence) | (0.04) | 0.11 | (0.57) | |||||||||
Adjusted diluted (pence) | (0.04) | 0.11 | (0.57) | |||||||||
Notes to interim financial statements | ||||||||||||
For the six months ended 31 December 2019 | ||||||||||||
6. EARNINGS PER SHARE (CONTINUED…) | ||||||||||||
6 months | 6 months | 12 months | ||||||||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | ||||||||||
Unaudited | Unaudited | Audited | ||||||||||
£'000s | £'000s | £'000s | ||||||||||
Profit for the period from all | ||||||||||||
operations for the purpose of earnings | ||||||||||||
per share: Basic Adjusted | 5,512 5,984 | 4,280 4,908 | 8,525 10,015 | |||||||||
Profit for the period from continuing | ||||||||||||
operations for the purpose of earnings | ||||||||||||
per share: Basic Adjusted | 5,687 6,095 | 4,022 4,583 | 10,982 11,726 | |||||||||
Profit for the period from discontinued | ||||||||||||
operations for the purpose of earnings | ||||||||||||
per share: Basic Adjusted | (175) (111) | 258 325 | (2,457) (1,711) | |||||||||
Weighted average number of shares in issue as follows: | ||||||||||||
6 months | 6 months | 12 months | ||||||||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | ||||||||||
Unaudited | Unaudited | Audited | ||||||||||
Weighted average number | ||||||||||||
Basic | 299,689,639 | 298,030,565 | 298,030,565 | |||||||||
Diluted | 300,356,007 | 301,511,219 | 302,420,648 | |||||||||
The adjusted profit for the period, adjusted basic earnings per ordinary share and adjusted diluted earnings per ordinary share exclude exceptional costs relating to share based payments £341,058 (2018: £450,370, 2019: £564,780), one-off acquisition costs of Comapi £6,548 (2018: £50,967, 2019: £58,824) and amortisation of acquired intangibles £123,512 (2018: £126,951, 2019: £521,709). | |||||||||
Notes to interim financial statements | |||||||||
For the six months ended 31 December 2019 | |||||||||
7. RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO NET CASH GENERATED FROM OPERATIONS | |||||||||
6 months | 6 months | 12 months | |||||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | |||||||
Unaudited | Unaudited | Audited | |||||||
£'000s | £'000s | £'000s | |||||||
Profit before income tax from all operations | 6,473 | 4,937 | 8,873 | ||||||
Adjustments for: | |||||||||
Depreciation | 195 | 210 | 465 | ||||||
Amortisation | 1,881 | 1,495 | 3,358 | ||||||
Right-of-use asset depreciation | 485 | - | - | ||||||
Exceptional costs | - | - | 344 | ||||||
(Profit)/Loss on disposal of fixed assets | - | 99 | - | ||||||
Share based payments | 341 | 450 | 565 | ||||||
IFRS 15 reclassification | - | - | (2,837) | ||||||
IFRS 16 reclassification | 78 | - | - | ||||||
Finance lease non-cash movement | 50 | - | 12 | ||||||
Finance income | (16) | (10) | (19) | ||||||
Currency revaluation | (133) | (25) | 42 | ||||||
(Increase)/Decrease in trade and other receivables | (1,475) | 507 | 811 | ||||||
(Decrease)/Increase in trade and other payables | (1,229) | (2,885) | 879 | ||||||
Net cash from operations | 6,650 | 4,778 | 12,493 | ||||||
8. CALLED UP SHARE CAPITAL | |||||||||
During the period 517,080 ordinary 0.5p shares were issued in respect to the exercise of share options. In return the Group received £178,750 in consideration. | |||||||||
Notes to interim financial statements | |||||||
For the six months ended 31 December 2019 | |||||||
9. CHANGES IN ACCOUNTING POLICES
This note explains the impact of the adoption of IFRS 16 Leases on the Group's financial statements and discloses the new accounting policies that have been applied from 1 January 2019 in note 9(b)below. The Group has adopted IFRS 16 retrospectively from 1 July 2019 but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 July 2019.
9(a). Adjustments recognised on adoption IFRS 16
On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 July 2019. The weighted average lessee's incremental borrowing rate applied to the lease liabilities on 1 July 2019 was 2.9%.
For leases previously classified as finance leases, the Group recognised the carrying amount of the lease asset and lease liability immediately before transition as the carrying amount of the right-of-use asset and the lease liability at the date of initial application. The measurement principles of IFRS 16 are only applied after that date. These finance leases were not remeasured at the date of initial application as they are considered immaterial.
2019 | |||||
£'000s | |||||
Operating lease commitments disclosed as at 30 June 2019 | 5,370 | ||||
Discounted using the incremental borrowing rate at 1 July 2019 | 5,760 | ||||
Add: finance lease liabilities recognised as at 30 June 2019 | 5 | ||||
Lease liability recognised as at 1 July 2019 | 5,765 | ||||
Of which are: | |||||
Current lease liabilities | 985 | ||||
Non-current lease liabilities | 4,780 | ||||
5,765 |
Notes to interim financial statements | |||||||
For the six months ended 31 December 2019 | |||||||
9. CHANGES IN ACCOUNTING POLICES (CONTINUED…)
The associated right-of-use assets for property leases and other right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 30 June 2019. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.
The recognised right-of-use assets relate to the following types of assets:
31 December 2019 | 1 July 2019 | ||||
£'000s | £'000s | ||||
Properties | 5,213 | 5,678 | |||
Motor vehicles | 61 | 82 | |||
Total right-of-use assets | 5,274 | 5,760 |
The change in accounting policy affected the following items in the balance sheet on 1 July 2019:
- Right-of-use assets - increased by £5,760,374
- Accruals and contract liabilities - decreased by £78,034
- Lease liabilities - increase by £5,760,374
- The net impact on retained earnings on 1 July 2019 was a decrease of £78,034
(i) Impact on segment disclosures and earnings per share
Adjusted EBITDA, segment assets and segment liabilities for December 2019 all increased as a result of the change in accounting policy. Lease liabilities are now included in segment liabilities, whereas finance lease liabilities were previously excluded from segment liabilities. The following segments were affected by the change in policy:
Notes to interim financial statements | |||||||
For the six months ended 31 December 2019 | |||||||
9. CHANGES IN ACCOUNTING POLICES (CONTINUED…)
Adjusted Profit before income tax | Segment assets | Net current assets | |||
£'000s | £'000s | £'000s | |||
EMEA | 4,458 | 54,707 | 18,903 | ||
US | 1,776 | 3,338 | 2,087 | ||
APAC | 309 | 1,222 | 718 | ||
6,543 | 59,267 | 21,708 | |||
Adjusted Profit before income tax | Segment assets | Net current assets | |||
£'000s | £'000s | £'000s | |||
Core | 6,598 | 56,169 | 22,188 | ||
CPaaS | (55) | 3,098 | (480) | ||
6,543 | 59,267 | 21,708 |
Adjusted earnings per share for all operations and for continuing operations decreased by 0.02p per share for the 6 months to 31 December 2019 as a result of the adoption of IFRS 16. There was no impact on the adjusted earnings per share for discontinued operations for the 6 months to 31 December 2019.
Notes to interim financial statements | |||||||
For the six months ended 31 December 2019 | |||||||
9. CHANGES IN ACCOUNTING POLICES (CONTINUED…)
(ii) Practical expedients applied
In applying IFRS 16 for the first time, the group has used the following practical expedients permitted by the standard:
- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
- reliance on previous assessments on whether leases are onerous
- the accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term leases
- the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The Group has also elected not to reassess whether a contract is, or contains, a lease at the date of initial application. Instead, for contracts entered into before the transition date the Group relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a lease.
(b) The Group's leasing activities and how these are accounted for
The group leases various offices, equipment and cars. Rental contracts are typically made for fixed periods of 1 to 10 years but may have extension options as described in (i) below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
Until 30 June 2019, leases of property, plant and equipment and cars were classified as either finance or operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to the income statement on a straight-line basis over the period of the lease.
From 1 July 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Notes to interim financial statements | |||||||
For the six months ended 31 December 2019 | |||||||
9. CHANGES IN ACCOUNTING POLICES (CONTINUED…)
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
- fixed payments (including in-substance fixed payments), less any lease incentives receivable
- variable lease payment that are based on an index or a rate
- amounts expected to be payable by the lessee under residual value guarantees
- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
- the amount of the initial measurement of lease liability
- any lease payments made at or before the commencement date less any lease incentives received
- any initial direct costs, and
- restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the income statement. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-equipment and small items of office furniture.
(i) Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor. None of the total lease payments made in the period to 31 December 2019 were optional.
In determining the lease term, management considers all facts and circumstances that create an
economic incentive to exercise an extension option, or not exercise a termination option. Extension
options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Potential future cash outflows have not been included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated), the amount of these cash flows is uncertain as several rounds of rent reviews are due before this extension date.
Notes to interim financial statements | |||||||||||
For the six months ended 31 December 2019 | |||||||||||
10. RELATED PARTY NOTE | |||||||||||
Transactions between the company and its subsidiaries, who are related parties, have been eliminated on | |||||||||||
consolidation and are not disclosed in this note. | |||||||||||
Key management remuneration: | |||||||||||
Key management include Directors and non-executive Directors | |||||||||||
The remuneration paid for key management for employee services are as follows: | |||||||||||
6 months | 6 months | 12 months | |||||||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | |||||||||
Unaudited | Unaudited | Audited | |||||||||
£'000s | £'000s | £'000s | |||||||||
Remuneration and other short-term benefits | 350 | 304 | 835 | ||||||||
Share based payments on the LTIP options granted | 220 | 169 | 389 | ||||||||
Pension cost | 13 | 11 | 21 | ||||||||
583 | 484 | 1,245 | |||||||||
The options granted to Milan Patel and Paraag Amin can only be exercised at the end of a 3-year performance period, based on an aggressive total shareholder return performance criterion. Under IFRS 2, the group has to provide an estimate for the costs based on Black Scholes model valuation each year, as if they are fully paid out at the end of the performance period in December 2020 to Milan Patel and October 2021 for Paraag Amin. To be fully paid out, the group must achieve a compounded 35% TSR over a 3-year period.
Notes to interim financial statements | |
For the six months ended 31 December 2019 |
10. RELATED PARTY NOTE (CONTINUED...)
6 months | 6 months | 12 months | |||||||||||
to 31 Dec 2019 | to 31 Dec 2018 | to 30 June 2019 | |||||||||||
Unaudited | Unaudited | Audited | |||||||||||
£'000s | £'000s | £'000s | |||||||||||
The following transactions were carried out with related parties | |||||||||||||
Sale of services | |||||||||||||
Entities controlled by non - executive director of the Group: | |||||||||||||
Cloudcall - Email marketing services | - | 4 | 12 | ||||||||||
Cadence Performance Ltd - Email marketing services | 1 | 1 | 2 | ||||||||||
1 | 5 | 14 | |||||||||||
Year end balances arising from the sale of services | |||||||||||||
Entities controlled by non-executive directors of the Group: | |||||||||||||
Cloudcall - Email marketing services | - | - | 1 | ||||||||||
- | - | 1 | |||||||||||
11. SUBSEQUENT EVENTS TO 31 DECEMBER 2019 | |||||||||||||
As at the date of these statements and the date they were approved by the Board of Directors there were no such events to report. | |||||||||||||
Copies of this interim statement are available form the Company at its registered office at, No 1 London Bridge London, SE1 9BG. The interim financial information document will also be available on the Company's website www.dotdigitalgroup.com. | |||||||||||||
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dotDigital Group plc published this content on 25 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 February 2020 07:03:13 UTC
