TIDMSWG
RNS Number : 4312W
Shearwater Group PLC
01 August 2018
1 August 2018
SHEARWATER GROUP PLC
Final Results
Gaining momentum in line with stated strategy
Shearwater Group plc (AIM: SWG, "Shearwater", or the "Group"),
the digital resilience group, has published its results for the
year ended 31 March 2018.
Strategic and operational highlights
-- Considerable progress against the Group's strategic aim of
building a leading UK based digital resilience group
-- Successfully completed the acquisitions of SecurEnvoy and
Newable Consulting (rebranded Xcina Consulting)
-- Significant double digit organic growth delivered by both
SecurEnvoy and Xcina Consulting since joining the Group
o Xcina Consulting returned to profitability ahead of plan
-- Post period end, acquired GeoLang, an award-winning Data Loss
Protection ("DLP") enterprise software company, and Crystal IT
(rebranded Xcina IS), augmenting Xcina's service proposition
Financial highlights
-- Group revenue of GBP6.2 million (2017: GBPnil), reflecting
10.7 months of trading from SecurEnvoy and 8.2 months of trading
from Xcina Consulting
o 54% of Group revenue (2017: GBPnil) generated through the
licencing of owned software products
o 46% of Group revenue (2017: GBPnil) through the provision of
services
-- Portfolio company (Segment) underlying EBITDA[1] of GBP1.1 million (2017: GBPnil)
-- Underlying Group EBITDA loss(1) of GBP0.8 million (2017: loss
GBP1.1 million) after administrative expenses and investments in
infrastructure and growth initiatives
-- Cash balance of GBP2.5 million (2017: GBP7.1 million)
David Williams, Chairman of Shearwater, said:
"Although at an early stage, we are gaining real momentum in
delivering on our 'buy, focus, grow' strategy. We have added a
number of businesses to the portfolio in our two segments -
Software and Services - with each experiencing strong growth.
"We continue to attract exceptional people who are looking to
access the infrastructure, support and wider Shearwater ecosystem
to grow and develop their businesses more effectively.
"We have made a great start to the new financial year, and look
forward to driving further operational performance through our
portfolio companies with the upside of making further acquisitions
in line with our strategy."
Enquiries:
Shearwater Group plc www.theshearwatergroup.co.uk
David Williams c/o Instinctif Partners
Michael (Mo) Stevens
Cenkos Securities plc - NOMAD
and Broker
Max Hartley - NOMAD
Julian Morse / Michael Johnson
- Sales +44 (0) 20 7397 8900
Instinctif Partners - Financial shearwater@instinctif.com
PR +44 (0) 20 7457 1412
Adrian Duffield / Chantal Woolcock
Business Review of Activities
Overview
This financial year has been one of significant progress for the Group.
As part of our transformation strategy, we have continued to make important
advances against our strategic objective of building a leading UK based
digital resilience group.
Through the acquisition of SecurEnvoy, we have established a platform
upon which we are now able to develop the Group's Identity and Access
Management offering, and following the acquisition of Newable Consulting
(rebranded Xcina Consulting), we have been able to launch and develop
Xcina, the Group's full service information security and assurance
solutions company.
We have also seen excellent organic growth within both SecurEnvoy and
Xcina Consulting since acquisition, as a result of the implementation
of the planned growth initiatives.
Post period end, the Group expanded its software product offering through
the acquisition of GeoLang, an award-winning DLP enterprise software
company, and augmented Xcina's service proposition through the acquisition
of Crystal IT (rebranded Xcina IS). Both businesses continue to make
excellent progress since joining the Group.
As a result of this growth and plans for the forthcoming year, the
Group has also invested in establishing the appropriate infrastructure
to support the development of our portfolio companies. This has included
the setting up of overseas offices in the US and Germany, which will
enable our portfolio companies to better serve international clients.
At a Group level, additional finance, information services, commercial
and HR capability has been developed to ensure our portfolio companies
are appropriately supported with shared services as they continue to
grow and expand.
Market opportunity
Through digitalisation and the rapidly growing interconnectivity of
enterprises, functions, people, objects and devices, organisations
continue to face unprecedented levels of pressure in needing to evolve
their business models so that they can digitally engage effectively
with all stakeholders and manage and protect their critical data and
information assets.
All of this is occurring at a time when attack vectors are increasing,
and the sophistication of threats is outpacing the capability and capacity
to respond.
As a result, organisations are having to rethink traditional approaches
to data and information management and security and move beyond standard
protection measures aimed at meeting minimum levels of compliance.
Organisations now have to consider how information security can be
embedded within business processes and operations to manage, monitor
and protect core data and information assets, while still competing
effectively in an increasingly globalised and interconnected digitalised
world.
Developing this digital resilience is key for all organisations irrespective
of size as digital technologies have become increasingly interwoven
and inseparable from business process such that functions are operating
with decreasing human oversight and interaction, and organisations
are digitally dependent upon the resilience of their systems.
In this connected digital environment, failure or partial failure of
any single underlying point, whether through malicious activity or
human error, can cascade and have catastrophic effects across an enterprise
or organisation.
This presents an attractive market opportunity for those providers
of digital resilience solutions and services which maintain trust between
users, provide assurance around the protection of critical data and
information assets, and support the operational effectiveness of the
wider enterprise.
Business strategy
The Group is focused on building a UK based group providing digital
resilience solutions and services. Through the application of its "buy,
focus, grow" strategy, the Group aims to identify investment and acquisition
opportunities where the target company has a leading product, solution,
service or consulting capability whose potential can be unlocked through
active management and capital investment.
Through recent acquisitions and a number of organic growth initiatives,
Shearwater is at the early stages of building a broad portfolio of
information security, governance, risk and compliance, cyber and cyber
security assets, which we believe in time will meet the ever-increasing
digital resilience demands from the Group's customers.
This will provide its current and prospective shareholders with exposure
to a large and rapidly growing sector through a portfolio approach,
which aims to balance risk and return in a highly dynamic and often
unpredictable operating environment.
In driving our strategy, we continue to leverage the substantial operating
experience we have within the Group covering technology, cyber, information
security, digital and communication sectors, and prior track records
of delivering shareholder value through accelerated buy and build processes.
Financial performance
The Group generated revenue of GBP6.2 million (2017: GBPnil), which
reflected 10.7 months of trading from SecurEnvoy and 8.2 months of
trading from Newable Consulting (rebranded Xcina Consulting) since
acquisition respectively.
Of the GBP6.2 million of revenue, 54% (2017: GBPnil) was generated
through the licencing of the Group's owned software products and 46%
(2017: GBPnil) through the provision of services.
The portfolio companies contributed a Segment underlying EBITDA of
GBP1.1 million, after taking into account investments made by the businesses
in specific growth initiatives (2017: GBPnil).
Shearwater generated an underlying EBITDA loss of GBP0.8 million, which
reflected the cost of the Group's head office, other overheads and
investments made in establishing and strengthening its infrastructure,
the launch of Xcina, and only partial trading contribution from the
portfolio companies (2017: underlying EBITDA loss GBP1.1 million).
After exceptional items of GBP1.0 million (2017: GBP0.4 million), amortisation
of acquired intangible assets, depreciation and share-based payments,
the Group made an operating loss of GBP2.9 million (2017: operating
loss GBP1.6 million). Of the GBP1.0 million of exceptional items, GBP0.7
million related to the acquisition of SecurEnvoy, GBP0.1 million related
to the acquisition of the business and assets of Newable Consulting,
with the remaining GBP0.2 million of costs incurred as a result of
other potential acquisition opportunities.
Due to the volatility of the share-based payment charge which will
vary year on year dependent on the level of completed acquisitions,
this is adjusted out in underlying EBITDA.
At the period end, Group cash was GBP2.5 million (2017: GBP7.1 million)
reflecting investments made in portfolio company growth initiatives,
including the costs incurred as a result of the creation and development
of Xcina, and Group overheads. These costs were partially offset by
strong cash generation at SecurEnvoy and a profitable contribution
from Xcina Consulting at an EBITDA level.
As previously disclosed, it is the intention of the Board to dispose
of the Gold Exploration rights which we anticipate will occur in the
next financial year.
Cash management continues to be a priority for the Group and actual
expenditure compared to budget is monitored closely to ensure that
it maintains adequate liquidity to meet financial commitments as they
arise.
Net cash used in operating activities was GBP(3.1) million (2017: GBP(0.9)
million). Net cash used in investing activities was GBP(10.0) million
(2017: GBP0.0 million) and net cash generated by financing activities
was GBP8.5 million (2017: GBP7.9 million). Overall net cash outflow
was GBP(4.6) million (2017: net cash inflow GBP7.0 million).
Key performance indicators
Integral to the performance management of the Group, the Board and
management monitor actual against budgeted revenue, costs and underlying
EBITDA on a monthly basis as part of the portfolio companies' monthly
business reviews, finance meetings and scheduled Board meetings.
The Board and management believe that revenue and underlying EBITDA
are key metrics to monitor the performance of the Group, as they provide
a good basis to judge underlying performance and are recognised by
its shareholders.
Underlying EBITDA is defined as profit before tax, before one off exceptional
items, share based payment charges, finance charges, depreciation and
amortisation.
In addition, control of bank and cash balances is a priority for the
Group and these are budgeted and monitored closely to ensure that the
Group maintains adequate liquidity to meet all of its financial commitments
as they arise.
Segment performance summary (including activities after the financial
year end)
Software (54% of Group revenue)
Software, comprising SecurEnvoy, generated GBP3.4 million of revenue
for 10.7 months of trading included in the financial year ended 31
March 2018. On a pro rata basis, this represents 17% growth compared
to the pre-acquisition period.
At a portfolio company underlying EBITDA level, SecurEnvoy contributed
GBP1.7 million to the total Segment EBITDA of GBP1.1 million, which
reflected strong performance within the UK business, offset by investments
made in the period, which are detailed below.
Since joining the Group in May 2017, SecurEnvoy has also made considerable
progress against the stated objectives at the time of acquisition.
It has established its overseas presence in the US and Germany to support
international growth ambitions, strengthened its senior leadership
team through the hire of a new Chief Information Officer to lead the
product development teams, and won its first contract under its newly
launch B-2-C product offering.
Post the period end, SecurEnvoy also made significant advances against
its product road map by developing its authentication security solutions
offering to meet increasing customer demand for cloud-based solutions.
In April 2018, the business launched its Cloud Service Partner proposition,
and is scheduled to release its own cloud multi-factor authentication
solution later this year.
On the sales side, SecurEnvoy has expanded its channel partners in
the US to 15, and most recently has been appointed as one of the first
Premier Citrix Ready Partners for the rapidly growing Identity and
Access Management sector. The Directors believe the business is now
ideally positioned for growth and look forward to continuing to deliver
against the post-acquisition plans.
In April 2018, the Group acquired GeoLang. As an award-winning DLP
enterprise software company, the acquisition established the Group's
position within the rapidly growing DLP market and augmented Shearwater's
GDPR and cyber security capability offering. The business is already
generating revenue having won its inaugural enterprise licence following
acquisition.
GeoLang's trading performance will be included within the Software
segment, whilst organisationally the business fits within Xcina where
it is able to leverage the existing infrastructure created alongside
the wider Shearwater Group in delivering its growth plan.
Services (46% of Group revenue)
Services, comprising Xcina Consulting, generated GBP2.9 million of
revenue for the 8.2 months of trading included in the financial year
ended 31 March 2018. Prior to acquisition, Xcina Consulting generated
GBP2.4 million of revenue for the 12 months ended 31 March 2017, and
on a pro rata basis has delivered revenue growth of 79% since acquisition.
As a result, the business generated a positive contribution to the
Group and continues to trade profitably at an EBITDA level and ahead
of the Directors' expectations.
Substantial progress has also been made in establishing Xcina as a
full service information security and assurance solutions and services
company. Launched following the acquisition of Newable Consulting in
July 2017 (rebranded Xcina Consulting), Xcina has expanded its solutions
offering from governance, compliance, technology risk and cyber security
assurance and advisory services to include the following:
* Xcina Managed Security Services Provider ("MSSP"),
which through its London-based Security Operations
Centre ("SOC"), provides outsourced SOC services,
data analytics, threat intelligence and incident
response;
* Xcina Information Services ("IS"), formed through the
acquisition of Crystal IT, which augments Xcina's
existing services capability and provides resilience
information services to SMEs; and
* Xcina Enterprise, which has been established to
provide digital transformation and information
security solutions to companies looking to embed
digital resilience within business strategy.
As a result of the investments made in establishing Xcina and the launch
of the new service lines detailed above, Services contributed a Segment
underlying EBITDA loss of GBP0.6 million.
In April 2018, Xcina was appointed as an approved supplier of data
and information assurance solutions to a global FTSE 100 company and
was awarded its first contract under this supplier arrangement providing
a Payment Card Industry Data Security Standard ("PCI DSS") architecture
review initially worth GBP0.2 million. This award serves to highlight
the applicability of Xcina's information and cyber security solutions
across corporate customers of all sizes and potential for additional
contract wins during the current financial year.
Outlook
The new financial year will see a full years' contribution from a number
of the Group's businesses and will benefit from the organic growth
initiatives implemented during 2018. Overall trading for the Group
continues in line with the Board's expectations.
The Software segment will include a full years' trading from SecurEnvoy
and nearly a full year from GeoLang as the Group continues to support
the business with its go-to-market strategy and moving it to a revenue
generating position.
We will look to develop the Software segment around a core set of Software
as a service ("SaaS") products with high levels of recurring revenue
and strong cash flow generation to benefit the Group over the coming
years.
Within Services, further organic growth is anticipated, which will
support the Group's decision to largely organically develop its full
service information security and assurance business, Xcina. It is expected
that Xcina will deliver substantial value for shareholders compared
to the acquisition of a market peer within the information security,
governance, regulatory and compliance advisory sectors.
The market outlook for providers of digital resilience solutions continues
to be extremely positive, with strong macro drivers creating a large
number of opportunities for growth. Identifying those opportunities
which if secured, can help our portfolio companies provide market leading
solutions to assure and protect the data and information assets of
our customers, whilst delivering enhanced returns will be key to our
success as a Group.
By applying our portfolio approach to growth and creating the right
environment to unlock growth from our acquisitions, the Group provides
investors with access to, and participation in a large and rapidly
growing sector, without overexposure to one particular technology or
service offering.
The Board has identified a number of potential acquisitions which meet
the Group's selection criteria and believes Shearwater is ideally positioned
as we move through the new financial year to make great strides in
its strategic aim of becoming a leading UK based digital resilience
group.
Consolidated statement of comprehensive income
for the year ended 31 March 2018
2017/18 2016/17
GBP (000) GBP (000)
----------- ----------------------------------------------- ----------- ----------- ------------ ----------------------- --------- -----------------------------
Revenue 6,240 -
Cost of sales (2,604) -
------------------------------------------------------------ ----------- ----------- ------------ ----------------------- --------- -----------------------------
Gross profit 3,636 -
Administrative expenses (6,520) (1,585)
------------------------------------------------------------ ------------------------------------ ----------------------- --------- -----------------------------
Operating loss (2,884) (1,585)
Finance income 2 1
Loss before tax (2,882) (1,584)
Income tax charge (3) -
Loss for the year and attributable to
equity holders of the Company (2,885) (1,584)
------------------------------------------------------------ ------------------------------------ ----------------------- --------- -----------------------------
Operating loss analysed as:
Underlying EBITDA (837) (1,076)
Amortisation of acquired intangibles (647) -
Depreciation of fixed assets (14) (1)
Share-based payments (366) (79)
Exceptional items (1,020) (429)
Finance income 2 1
Loss before tax (2,882) (1,584)
------------------------------------------------------------ ------------------------------------ ----------------------- --------- -----------------------------
Other comprehensive income
Items that may be reclassified to profit
and loss:
Change in fair value of available-for-sale
assets (67) 76
Total comprehensive loss for the year (2,952) (1,508)
------------------------------------------------------------ ------------------------------------ ----------------------- --------- -----------------------------
Loss per share
Basic and diluted (pence per share) (0.31) (0.54)
Consolidated statement of financial position
as at 31 March 2018
Group Company
2018 2017 2018 2017
GBP GBP
(000) (000) GBP (000) GBP (000)
-------------------------- -------- ---------- ---------- ------------ --- --------------
Assets
Non-current assets
Goodwill 12,956 - - -
Other intangible assets 8,220 935 986 935
Investments in
subsidiaries - - 20,221 -
Available for sale assets 51 118 51 118
Property, plant and equipment 76 1 18 1
Amounts owed by
subsidiary undertaking - - 1,662 -
Total non-current assets 21,303 1,054 22,938 1,054
------------------------------------ ---------- ---------- ------------ --- --------------
Current Assets
Trade and other receivables 1,949 86 47 86
Cash and cash equivalents 2,493 7,073 540 7,073
Total current assets 4,442 7,159 587 7,159
------------------------------------ ---------- ---------- ------------ --- --------------
Total assets 25,745 8,213 23,525 8,213
------------------------------------ ---------- ---------- ------------ --- --------------
Liabilities
Current liabilities
Trade and other payables 1,755 732 1,243 737
Total current liabilities assets 1,755 732 1,243 737
------------------------------------ ---------- ---------- ------------ --- --------------
Non-current liabilities
Deferred tax 1,847 - - -
Total non-current
liabilities assets 1,847 - - -
-------------------------- -------- ---------- ---------- ------------ --- --------------
Total liabilities 3,602 732 1,243 737
------------------------------------ ---------- ---------- ------------ --- --------------
Net assets 22,143 7,481 22,282 7,476
------------------------------------ ---------- ---------- ------------ --- --------------
Capital and reserves
Share capital 9,644 5,353 9,644 5,353
Share premium 28,923 15,962 28,923 15,957
Available for sale reserve 36 103 36 103
Other reserves 401 39 401 39
Retained deficit (16,861) (13,976) (16,722) (13,976)
Equity attributable to owners of
the Company 22,143 7,481 22,282 7,476
------------------------------------ ---------- ---------- ------------ --- --------------
Total equity and
liabilities 25,745 8,213 23,525 8,213
--------------------------- ------- ---------- ---------- ------------ --- --------------
Consolidated statement of changes in equity
for the year ended 31 March 2018
Available
Share for sale Other
Retained Total
capital Share premium ( reserve reserve
deficit Equity
GBP
Group GBP (000) GBP (000) GBP (000) GBP (000)
GBP (000) (000)
----------------------------------------------- ------------- ----------------------- ------------- --------------
----------- ---------
At 1 April 2016 1,719 11,593 27 -
(12,432) 907
Loss for the year - - - -
(1,584) (1,584)
Other comprehensive loss for the period - - 76 -
- 76
Total comprehensive loss for the period - - 76 -
(1,584) (1,508)
Contributions by and distributions to owners
Issue of share capital 3,634 4,605 - -
- 8,239
Share issue costs - (236) - -
- (236)
Share based payments - - - 39
40 79
At 31 March 2017 5,353 15,962 103 39
(13,976) 7,481
----------------------------------------------- ------------- ----------------------- ------------- --------------
----------- ---------
Loss for the year - - - -
(2,885) (2,885)
Other comprehensive loss for the period - - (67) -
- (67)
Total comprehensive loss for the period 5,353 15,962 36 39
(16,861) 4,529
Contributions by and distributions to owners
Issue of share capital 4,291 13,491 - -
- 17,782
Share issue costs - (530) - -
- (530)
Share based payments - - - 362
- 362
At 31 March 2018 9,644 28,923 36 401
(16,861) 22,143
----------------------------------------------- ------------- ----------------------- ------------- --------------
----------- ---------
Share Available
capital Share premium (Note for sale Other
Retained Total
(Note 18) 18) reserve reserve
deficit Equity
GBP
Company GBP (000) GBP (000) GBP (000) GBP (000)
GBP (000) (000)
----------------------------------------------- ------------- ----------------------- ------------- --------------
----------- ---------
At 1 April 2016 1,719 11,593 27 -
(12,432) 907
Loss for the year - - - -
(1,584) (1,584)
Other comprehensive loss for the period - - 76 -
- 76
Total comprehensive loss for the period - - 76 -
(1,584) (1,508)
Contributions by and distributions to owners
Issue of share capital 3,634 4,600 - -
- 8,234
Share issue costs - (236) - -
- (236)
Share based payments - - - 39
40 79
At 31 March 2017 5,353 15,957 103 39
(13,976) 7,476
----------------------------------------------- ------------- ----------------------- ------------- --------------
----------- ---------
Loss for the year - - - -
(2,746) (2,746)
Other comprehensive loss for the period - - (67) -
- (67)
Total comprehensive loss for the period 5,353 15,957 36 39
(16,722) 4,663
Contributions by and distributions to owners
Issue of share capital 4,291 13,491 - -
- 17,787
Share issue costs - (530) - -
- (530)
Share based payments - - - 362
- 362
At 31 March 2018 9,644 28,918 36 401
(16,722) 22,282
----------------------------------------------- ------------- ----------------------- ------------- --------------
----------- ---------
Consolidated Cash Flow Statement
for the year ended 31 March 2018
Group
Company
2017/18 2016/17
2017/18 2016/17
GBP
GBP GBP
GBP (000) (000)
(000) (000)
--- --------------------------------------------------------- ------------- ---------------- ----- --------- ---
---------- ---------
Cash flows from operating activities
Loss for the period (2,885) (1,584)
(2,747) (1,584)
Adjustments for:
Depreciation of property, plant and machinery 14 1
4 1
Amortisation of acquired intangible assets 647 -
- -
Finance income (2) (1)
(1) (1)
Share-based payment charge 366 79
366 79
Income tax 3 -
- -
Cash flow from operating activities before changes in
working capital (1,857) (1,505)
(2,378) (1,505)
(Increase)/decrease in trade and other receivables (1,412) (75)
39 (75)
(Decrease)/increase in trade and other payables 457 670
(1,149) 670
Cash used in operations (2,812) (910)
(3,488) (910)
-------------------------------------------------------------- ------------- ---------------- ----- --------- ---
---------- ---------
Net foreign exchange movements (19) -
- -
Tax paid (280) -
- -
-------------------------------------------------------------- ------------- ---------------- ----- ---
---------- ---------
Net cash used in operating activities (3,111) (910)
(3,488) (910)
-------------------------------------------------------------- ------------- ---------------- ----- --------- ---
---------- ---------
Investing activities
Acquisition of subsidiaries, net of cash acquired (9,839) -
(11,466) -
Purchase of property, plant and machinery (72) (2)
(20) (2)
Purchase of software (19) -
- -
Interest received 2 1
1 1
Gold exploration payments (50) (9)
(50) (9)
Net cash used in investing activities (9,978) (10)
(11,535) (10)
-------------------------------------------------------------- ------------- ---------------- ----- --------- ---
---------- ---------
Financing activities
Proceeds from issue of share capital 9,020 8,084
9,020 8,084
Expenses paid in connection with share issues (530) (236)
(530) (236)
Proceeds from convertible loan - 100
- 100
Net cash generated by financing activities 8,490 7,948
8,490 7,948
-------------------------------------------------------------- ------------- ---------------- ----- --------- ---
---------- ---------
Net (decrease)/increase in cash and cash equivalents (4,599) 7,028
(6,533) 7,028
----------------------------------------------------------------------------- ---------------- ----- --------- ---
---------- ---------
Foreign exchange movement on cash and cash equivalents 19 -
- -
Cash and cash equivalents at the beginning of the period 7,073 45
7,073 45
Cash and cash equivalents at the end of the period 2,493 7,073
540 7,073
-------------------------------------------------------------- ------------- ---------------- ----- --------- ---
---------- ---------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH
2017
1. Basis of preparation
The financial statements are presented in Great Britain Pounds
Sterling, which is also the Company's functional currency. All
values are rounded to the nearest thousand Pounds (GBP'000), unless
otherwise stated.
These financial statements for the year ended 31 March 2018 have
been prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations
as adopted by the European Union (collectively EU IFRS). It is
required of Group management to exercise judgement in applying the
Group's accounting policies. The areas where significant judgments
and estimates have been made in preparing the financial statements
and their effect are disclosed in note 1 of the Annual Report. The
Financial statements have been prepared on the going concern basis,
following the Directors review of the Company's operations, current
financial position and cash flow forecasts. The Directors are
satisfied that sufficient cash resources are available to meet the
financial commitments as they arise and for at least twelve months
from the date of signing the financial statements.
The financial information for the year ended 31 March 2018 and
the year ended 31 March 2017 does not constitute the company's
statutory accounts for those years.
The statutory accounts for the year will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting. The auditors' reports on those accounts was unqualified,
did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act
2006.
2. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to the ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
For diluted loss per share, the weighted average number of
shares in issue is adjusted to assume conversion of all the
potential dilutive ordinary shares. The potential dilutive shares
are anti-dilutive for the twelve months ended 31 March 2018 and the
twelve months ended 31 March 2017 as the Group is loss making.
At the reporting date, there were 18,815,074 (2017: 3,378,882)
potentially dilutive ordinary shares. Dilutive potential ordinary
shares relate to share options.
The calculation of the basic and diluted earnings per share from
total operations attributable to Shareholders is based on the
following data:
2017/18 2016/17
GBP (000) GBP (000)
-------------------------------------------------- ------------- -------------
Net loss from total operations
Earnings for the purposes of basic and diluted
earnings per share being net loss attributable
to Shareholders (2,885) (1,584)
Number of
shares No No
Weighted average number of ordinary shares for
the purpose of basic and diluted earnings per
share 917,725,525 291,850,286
Earnings per share Pence Pence
Basic and
diluted (0.31) (0.54)
--------------------------------------------------- ------------- -------------
3. Events after the reporting period
On 4 April 2018, the Group acquired the entire share capital of
GeoLang Holdings Limited, an award-winning pre-revenue DLP
enterprise software company. The total consideration for the
acquisition is GBP1.7million, which is to be settled through the
issuance of 43,165,750 ordinary shares of the Group at an issue
price of 4 pence per ordinary share to the GeoLang shareholders. At
the same time, the Group agreed to repay GBP0.3 million of
GeoLang's indebtedness.
On acquisition GeoLang had GBP0.02 million cash, The Group
acquired GeoLang from its founding management team, who are
continuing in the business. The process of fair valuing GeoLang has
not been completed at the date of these financial statements.
Subject to this process to fair value, the group acquired
approximately GBP0.3 million of net liabilities. The excess
consideration above the fair value of these acquired net
liabilities will be recognised as goodwill and intangible asset
following completion of the exercise to fair value. All amounts are
disclosed as provisional.
On 26 April 2018, the Group acquired the business and assets of
Crystal IT Services Limited, a Cardiff based provider of cyber
security and business information technology solutions. On joining
the Group, Crystal IT was rebranded Xcina IS. The total
consideration for the acquisition was GBP35,000, which has been
settled in cash.
On acquisition Crystal IT had GBP2,199 in cash, The Group
acquired Crystal IT from its founder, who has continued in the
business. The process of fair valuing the assets of Crystal IT has
not been completed at the date of these financial statements.
Subject to this process to fair value, the group acquired
approximately GBP8,000 of net assets. The excess consideration
above the fair value of these acquired net liabilities will be
recognised as goodwill and intangible asset following completion of
the exercise to fair value. All amounts are disclosed as
provisional.
On 18 June 2018 Giles Willits exercised 521,739 options
following which the Company issued an allotted 521,739 new ordinary
shares to him.
[1] Underlying EBITDA is defined as profit before tax, before
one off exceptional items, share based payment charges, finance
charges, depreciation and amortisation
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END
FR SSWSIFFASEEA
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