TIDMNETD
RNS Number : 1361K
NetDimensions (Holdings) Limited
19 September 2016
NetDimensions (Holdings) Limited
("NetDimensions" or the "Company" or the "Group")
Half Yearly Report
NetDimensions (AIM: NETD; OTCQX: NETDY), a global provider of
performance, knowledge and learning management systems, is pleased
to announce its half year results for the period ending 30 June
2016.
Financial Highlights
-- Total revenue of US$10.5M (2015 H1: US$10.6M)
o 6% increase in revenue from our global hosted secure SaaS
offering to US$5.4M (2015 H1: US$5.1M)
-- Gross margin increased to 85% (2015 H1: 81%)
-- 56% improvement in adjusted EBITDA loss to US$0.8M (2015 H1: loss of US$1.8M)
o 8% reduction in cost of sales, selling & operating
expenses to US$11.9M (2015 H1: US$12.9M)
-- Cash as of 30 June 2016 US$11.2M (2015 FY: US$12.0M)
Operations Highlights
-- 4.2M active users at the end of the period (2015 H1: 3.9M)
-- Recurring revenue was 70% of total revenue in the period (2015 H1: 68%)
-- 12% increase in Research & Development investment to US$1.8M (2015 H1: US$1.6M)
o All of which was expensed to the Income statement during the
period
-- 17 new clients added in the period through direct and
reseller channels with a combined contracted value of US$1.4M
Graham Higgins, Chairman of NetDimensions, commented: "The
Company made good progress in the period in terms of better cost
control and declaring a substantially smaller loss than the prior
period. The Company did experience some delays in rolling out some
larger client contracts in the first half, however the high
consequence industries which we service continue to show demand for
our product suite."
Enquiries:
NetDimensions (Holdings) Tel: +852 2122 4500
Limited
Jay Shaw
Matthew Chaloner
Panmure Gordon (UK) Limited Tel: +44 20 7886 2500
(Nomad & Broker)
Fred Walsh
Peter Steel
Walbrook PR Ltd (Financial Tel: +44 20 7933 8780
Public Relations)
Paul Cornelius netdimensions@walbrookpr.com
Sam Allen
Nick Rome
Helen Cresswell
About NetDimensions
Established in 1999, NetDimensions (AIM: NETD; OTCQX: NETDY) is
a global provider of performance, knowledge and learning management
solutions to high consequence industries.
NetDimensions provides companies, government agencies and other
organisations with talent management solutions to personalise
learning, share knowledge, enhance performance, foster
collaboration and manage compliance programmes for employees,
customers, partners and suppliers.
Recognised as one of the talent management industry's top-rated
technology suppliers, NetDimensions' award-winning solutions have
been chosen by leading organisations worldwide including ING,
Cathay Pacific, Chicago Police Department, Geely Automotive, Fugro
Group and Fresenius Medical Care, tesa SE and DB Schenker.
NetDimensions is ISO 9001 certified and NetDimensions hosted
services are ISO 27001 certified.
For more information, visit www.NetDimensions.com or follow
@netdimensions on Twitter.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Chairman's Statement for the six months Ended 30 June 2016
The revenue in the six months to 30 June 2016 was similar to the
prior period at US$10.5M (2015 H1: US$10.6M). The sales in the
first half were impacted by delays in the roll-out of some larger
client engagements which impacted both growth in licence revenue
and associated services.
Financial Highlights
-- Total revenue of US$10.5M (2015 H1: US$10.6M)
o 6% increase in revenue from our global hosted secure SaaS
offering to US$5.4M (2015 H1: US$5.1M)
-- Gross margin increased to 85% (2015 H1: 81%)
-- 56% improvement in the adjusted EBITDA loss to US$0.8M (2015 H1: loss of US$1.8M)
o 8% reduction in cost of sales, selling & operating
expenses to US$11.9M (2015 H1: US$12.9M)
-- Cash as of 30 June 2016 US$11.2M (2015 FY: US$12.0M)
Financial Summary
The financial results for the period ending 30 June 2016 saw
both revenue and invoiced sales coming in somewhat lower than
expected. Revenue was largely unchanged when compared to the six
months to June 2015, US$10.5M (2015 H1: US$10.6M) and invoiced
sales were 3% lower, US$9.5M (2015 H1: US$9.8M).
Revenue from higher margin SaaS licences and multi-year on
premise licences increased by 8% to US$6.8M (2015 H1: US$6.3M). The
increase in licence revenue was off-set by a reduction in support
and maintenance revenue which declined by 33% to US$0.6M (2015 H1:
US$0.9M) and software customisation & implementation revenue
which declined by 9% to US$3.1M (2015 H1: US$3.4M). The reduction
in support and maintenance revenue is a result of the Company's
strategy of transitioning clients away from legacy perpetual
licences to either SaaS or multi-year on premise licenses. Software
customisation & implementation revenue was impacted by the
delays in the roll out of some larger client engagements.
Invoiced sales to clients in high consequence industries
represented 91% of total invoiced sales (2015 H1: 92%), which is in
line with our strategy of becoming a leading provider of Talent
Management Systems and related compliance solutions to high
consequence industries.
The North America region was the largest market for the Group
during the period comprising 48% of Group revenues. Europe, Middle
East & Africa ("EMEA") accounted for 40% of Group revenues and
Asia Pacific including China 10%. The rest of the world made up
2%.
The Group continues to focus on supplying software via its
global hosted secure SaaS offering and revenues from this product
offering increased by 6% to US$5.4M (2015 H1: US$5.1M).
The Company continued to make improvements in expense management
leading to a reduction of 8% in cost of sales, selling and
operating expenses to US$11.9M (2015 H1: US$12.9M).
Gross Margins improved in the period to 85% (2015 H1: 81%) as a
result of a reduction in the costs of sales related to services and
a better product mix of higher-margin licence revenue which
represented 64% of total revenue (2015 H1: 60%).
The improved margin and reduction in expenses resulted in the
Group's adjusted EBITDA loss coming in 56% better than prior
period. The Group's adjusted EBITDA loss excluding net foreign
exchange gains US$0.2M, intangible asset amortisation (US$0.2M) and
non-cash share-based payments (US$0.3M), was $0.8M (2015 H1: loss
of US$1.8M). NetDimensions' loss before tax was US$1.2M (2015 H1:
loss of US$2.5M).
Cash generated from operating activities was US$0.2M in the
period (2015 H1: cash absorption of US$1.3M). The Group's cash
balance at the end of the period was US$11.2M (2015 H1: US$3.5M)
and the accounts receivable balance was US$4.6M (2015 H1:
US$3.5M).
Operations Review
During the period we made the following progress in line with
our business plan:
-- 4.2M active users at the end of the period (2015 H1: 3.9M)
-- Recurring revenue was 70% of total revenue in the period (2015 H1: 68%)
-- 12% increase in Research & Development investment to US$1.8M (2015 H1: US$1.6M)
o All of which was expensed to the Income statement during the
period
-- NetDimensions Ranked as a Leader in the 2016 Aragon Research
Globe(TM) for Corporate Learning. NetDimensions was ranked as a
'Leader' for excellence in:
o enterprise LMS functionality
o talent management
o compliance
o analytics
o language support
-- NetDimensions has been positioned again as a "Core Leader" in
the unique European learning and talent market insight report,
Fosway 9-Grid(TM) for Learning Management Systems (LMS)
-- 17 new clients added in the year through direct and reseller
channels with a combined contracted value of US$1.4M. These new
clients operate in a number of high consequence industries
including healthcare, financial services, life sciences and
precision manufacturing
Board
James Brooke, Non-Executive Director of the Company has decided
to resign from the Company with immediate effect. We would like to
thank James Brooke, for his contribution to the Board over the last
three years, his financial expertise has been an asset to the
Company and we are glad that he will continue to retain an interest
in the Company as a valued shareholder, the Board would like to
thank him and wish him well for the future.
Outlook
The Company made good progress in the period in terms of better
cost control and declaring a substantially smaller loss than the
prior period. The Company did experience some delays in rolling out
some larger client contracts in the first half, however the high
consequence industries which we service continue to show demand for
our product suite.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2016
Note Unaudited
Six months ended
30 June _
2016 2015
US$ US$
Revenue 5 10,491,583 10,592,318
Cost of sales 6 (1,576,233) (2,021,335)
------------------ ------------------
Gross profit 8,915,350 8,570,983
Other gains/(losses), net 194,525 (201,663)
Selling expenses 6 (6,027,938) (6,244,011)
Operating expenses 6 (4,272,637) (4,613,752)
------------------ ------------------
Operating loss (1,190,700) (2,488,443)
Finance income 367 498
Finance costs (549) (834)
------------------ ------------------
Finance costs, net 7 (182) (336)
----------------- ------------------
Loss before income tax (1,190,882) (2,488,779)
Income tax expense - (3,540)
------------------ ------------------
Loss for the period (1,190,882) (2,492,319)
Attributable to:
Equity holders of the Company (1,190,882) (2,492,319)
Loss per share attributable
to owners
of the Company during the
period
(expressed in US$ cents
per share)
- Basic 8 (2.3) (6.4)
- Diluted 8 (2.3) (6.4)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2016
Unaudited
Six months ended
30 June
2016 2016
US$ US$
Loss for the period (1,190,882) (2,492,319)
Other comprehensive (loss)/income:
Currency translation differences (907,041) 48,137
---------------- ----------------
Other comprehensive (loss)/income
for the period (907,041) 48,137
---------------- ----------------
Total comprehensive loss for the
period (2,097,923) (2,444,182)
Total comprehensive loss attributable
to
owners of the Company (2,097,923) (2,444,182)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Unaudited Unaudited Audited
30 June 30 June 31 December
Note 2016 2015 2015
US$ US$ US$
ASSETS
Non-current assets
Property, plant and
equipment 9 328,697 302,581 260,030
Intangible assets 10 2,431,930 2,820,022 2,590,605
Deposits 171,572 29,498 168,037
------------------ ------------------ ------------------
2,932,199 3,152,101 3,018,672
------------------ ------------------ ------------------
Current assets
Accounts and other
receivables, prepayments
and deposits 5,184,052 4,118,584 9,030,267
Tax recoverable - 1,460 -
Cash and bank balances 11 11,190,765 3,536,248 11,981,221
------------------ ------------------ ------------------
16,374,817 7,656,292 21,011,488
------------------ ------------------ ------------------
Total assets 19,307,016 10,808,393 24,030,160
EQUITY
Equity attributable
to owners of the Company
Share capital 12 51,230 39,089 51,150
Other reserves 28,085,621 18,623,045 29,147,076
Accumulated losses (18,251,711) (17,493,183) (17,078,149)
------------------ ------------------ ------------------
Total equity 9,885,140 1,168,951 12,120,077
------------------ ------------------ ------------------
LIABILITIES
Non-current liabilities
Deferred income tax
liabilities - - 3,567
Obligations under
finance leases 12,344 1,172 14,412
Deferred revenue 112,607 209,260 61,789
------------------ ------------------ ------------------
124,951 210,432 79,768
------------------ ------------------ ------------------
Current liabilities
Accounts and other
payables 1,337,910 1,483,216 2,967,993
Deferred revenue 7,487,172 7,487,637 8,727,155
Dividend payable 467,729 373,518 -
Obligations under
finance leases 4,114 2,357 4,118
Income tax payable - 82,282 131,049
------------------ ------------------ ------------------
9,296,925 9,429,010 11,830,315
------------------ ------------------ ------------------
Total liabilities 9,421,876 9,639,442 11,910,083
------------------ ------------------ -----------------
Total equity and liabilities 19,307,016 10,808,393 24,030,160
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2016
Attributable to owners of the Company
Share-based
Capital payment
Share Share redemption Translation compensation Accumulated
capital premium reserve reserve reserve losses Total
US$ US$ US$ US$ US$ US$ US$
At 1 January
2015 38,763 17,702,373 850 216,288 852,548 (15,006,278) 3,804,544
Comprehensive
loss:
Loss for the
period - - - - - (2,492,319) (2,492,319)
Other
comprehensive
income for the
period:
Currency
translation
differences - - - 48,137 - - 48,137
---------------- ---------------- ---------------- ---------------- ---------------- ------------------ ----------------
Total
comprehensive
income/(loss)
for
the period - - - 48,137 - (2,492,319) (2,444,182)
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Transactions
with
owners in
their
capacity as
owners
Employee
share potion
benefits - - - - 21,124 - 21,124
Issue of
shares
to
non-executive
directors 52 65,596 - - - - 65,648
Issue of
shares
upon exercise
of
share
options 274 151,285 - - (56,224) - 95,335
Transfer to
accumulated
losses upon
forfeiture
of share
options - - - - (5,414) 5,414 -
Dividend
relating
to 2014 - (373,518) - - - - (373,518)
---------------- ---------------- ---------------- ---------------- ---------------- ------------------ ----------------
At 30 June
2015
(unaudited) 39,089 17,545,736 850 264,425 812,034 (17,493,183) 1,168,951
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2016
Attributable to owners of the Company
Share-based
Capital payment
Share Share redemption Translation compensation Accumulated
capital premium reserve reserve reserve losses Total
US$ US$ US$ US$ US$ US$ US$
At 1 January
2016 51,150 28,062,193 850 59,999 1,024,034 (17,078,149) 12,120,077
Comprehensive
loss:
Loss for the
period - - - - - (1,190,882) (1,190,882)
Other
comprehensive
loss for the
period:
Currency
translation
differences - - - (907,041) - - (907,041)
---------------- ---------------- ---------------- ---------------- ---------------- ------------------ ----------------
Total
comprehensive
loss for the
period - - - (907,041) - (1,190,882) (2,097,923)
-------------- -------------- -------------- -------------- --------------- --------------- --------------
Transactions
with
owners in
their
capacity as
owners
Employee
share potion
benefits - - - - 272,661 - 272,661
Issue of
shares
to
non-executive
directors 35 30,483 - - - - 30,518
Allotment of
shares
to a
non-executive
director but
not
yet issued - - - - 13,876 - 13,876
Issue of
shares
upon exercise
of
share
options 45 21,094 - - (7,479) - 13,660
Transfer to
accumulated
losses upon
forfeiture
of share
options - - - - (17,320) 17,320 -
Dividend
relating
to 2015 - (467,729) - - - - (467,729)
---------------- ---------------- ---------------- ---------------- ---------------- ------------------ ----------------
At 30 June
2016
(unaudited) 51,230 27,646,041 850 (847,042) 1,285,772 (18,251,711) 9,885,140
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2016
Note Unaudited
Six months ended
30 June
2016 2015
US$ US$
Cash flows from operating
activities
Cash generated from/(used
in) operations 14(a) 330,339 (1,244,684)
Interest paid (549) (834)
Income tax paid (122,237) (13,984)
---------------- ----------------
Net cash generated from/(used
in) operating activities 207,553 (1,259,502)
---------------- ----------------
Cash flows from investing
activities
Purchase of property, plant
and equipment (157,698) (142,041)
Purchase of intangible assets (7,120) (12,121)
Interest received 367 498
Proceeds from disposal of
property, plant and equipment 14(b) 1,314 -
Decrease in bank deposits
with original maturity of
over three months - 40,047
---------------- ----------------
Net cash used in investing
activities (163,137) (113,617)
---------------- ----------------
Cash flows from financing
activities
Proceeds from issuance of
shares under share option
scheme 13,660 95,335
Repayments of capital element
of finance leases (2,072) (1,741)
---------------- ----------------
Net cash generated from
financing activities 11,588 93,594
---------------- ----------------
Net increase /(decrease)
in cash and cash equivalents 56,004 (1,279,525)
Cash and cash equivalents
at beginning of the period 11,731,221 4,867,071
Effect of foreign exchange
rate changes (846,460) (51,298)
---------------- ----------------
Cash and cash equivalents
at end of the period 11 10,940,765 3,536,248
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
1 GENERAL INFORMATION
NetDimensions (Holdings) Limited (the "Company") was
incorporated in the Cayman Islands as a limited liability company
under the Companies Law (2000) Revision on 10 July 2000. The
address of its registered office is P.O. Box 309, Ugland House,
South Church Street, George Town, Grand Cayman, Cayman Islands,
British West Indies. The address of its head office and principal
place of business in Hong Kong is 17/F., Siu On Centre, 188
Lockhart Road, Wan Chai, Hong Kong.
The principal activities of the Company and its subsidiaries
(together the "Group") are licensing of computer software and the
provision of related services.
The Company's ordinary shares were admitted to trading on the
Alternative Investment Market ("AIM") operated by the London Stock
Exchange. On 7 August 2012, the Company's ordinary shares were also
admitted to trading on the OTCQX platform operated by OTC Markets
Group, Inc.
This condensed consolidated interim financial information is
presented in United States Dollars ("US$"), unless otherwise
stated.
This condensed consolidated interim financial information for
the six months ended 30 June 2015 and 2016 have not been
audited.
2 SUMMARY OF SIGIFICANT ACCOUNTING POLICIES
(a) Basic of preparation
The Company has a financial year end date of 31 December. This
condensed consolidated interim financial information for the six
months ended 30 June 2016 has been prepared in accordance with
International Accounting Standard ("IAS") 34, "Interim Financial
Reporting". The condensed consolidated interim financial
information should be read in conjunction with the annual financial
statements for the year ended 31 December 2015, which have been
prepared in accordance with International Financial Reporting
Standards ("IFRS") issued by the International Accounting Standards
Boards ("IASB").
(b) Significant accounting policies
Except as described below, the accounting policies applied are
consistent with those of the annual financial statements for the
year ended 31 December 2015, as described in those annual financial
statements.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
(i) Effect of adopting new and amendments to standards and interpretations
During the year, the Group has adopted all of the new standards,
amendments to standards and interpretations issued by IASB that are
relevant to the Group's operations and mandatory for annual periods
beginning on or after 1 January 2016. The adoption of these new
standards, amendments to standards and interpretations did not
result in a significant impact on the results and financial
position of the Group.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES (CONTINUED)
(ii) New standards, amendments to standards and interpretations
that have been issued but are not yet effective:
Effective
for the
accounting
period beginning
on or after
IAS 7 (Amendments) Statement of Cash 1 January
Flows 2017
IAS 12 (Amendments) Income Taxes 1 January
2017
IFRS 9 Financial Instruments 1 January
2018
IFRS 15 Revenue from Contracts 1 January
with customers 2018
IFRS 16 Leases 1 January
2019
IFRS 10 and Sale of Contribution To be determined
IAS 28 (Amendments) of Assets between
and Investor and
its Associate or
Joint Venture
The Group will adopt the above new standards, amendments to
standards and interpretations to existing standards as and when
they become effective. The Group has already commenced the
assessment of the impact to the Group and is not yet in a position
to state whether these would have a significant impact on its
results of operations and financial position.
3 ESTIMATES
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this condensed consolidated interim financial
information, the significant judgments made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were that same as those that applied to the
consolidated financial statements for the year ended 31 December
2015, with the exception of changes in estimate that are required
in determining the provision for income tax.
4 FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial
risks: market risk (including foreign exchange risk and cash flow
interest rate risk), credit risk and liquidity risk.
The condensed consolidated interim financial information does
not include all financial risk management information and
disclosures required in the annual financial statements, and should
be read in conjunction with the Group's annual financial statements
for the year ended 31 December 2015.
There have been no changes in the risk management department
since year end or in any risk management policies since year
end.
5 REVENUE AND SEGMENT INFORMATION
Revenue represents income from software licensing and the
provision of hosting, support and maintenance, software
customisation and implementation services recognised during the
period and is analysed as follows:
Unaudited
Six months ended
30 June
2016 2015
US$ US$
Software licensing 1,343,175 1,211,213
Hosting services 5,444,844 5,126,514
Support and maintenance 551,448 890,118
Software customisation and
implementation 3,152,116 3,364,473
---------------- ----------------
10,491,583 10,592,318
The chief operating decision-maker ("CODM") has been identified
as the executive directors of the Company. Management has
determined the operating segments based on the reports reviewed by
the CODM that are used to assess performance and allocate
resources. The CODM considers the business from the geographic
perspective, including North America, Europe, Middle East and
Africa ("EMEA"), Asia Pacific and Rest of the World, which are also
the Group's reportable operating segments.
The Group's revenue is mainly derived from customers located in
North America, EMEA, Asia Pacific and Rest of the World, the
Group's facilities and other assets are located predominantly in
North America, EMEA, Asia Pacific and Rest of the World.
Segment performance is evaluated based on segment results, which
is a measure of adjusted loss before income tax. The adjusted loss
before income tax is measured consistently with the Group's loss
before income tax, except that amortisation of intangible assets -
customer base, unallocated corporate expenses, finance income and
finance costs are not allocated to individual segment.
Segment assets consist primarily of property, plant and
equipment, intangible assets, accounts and other receivables,
prepayments and deposits, and cash and bank balances excluding for
corporate use. Cash and bank balances for corporate use are
excluded from segment assets.
5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
Segmental information for the six months ended 30 June 2016 is
as follows:
Rest
of
North Asia the
America EMEA Pacific World Total
US$ US$ US$ US$ US$
Revenue from
external customers 5,051,672 4,157,290 1,032,363 250,258 10,491,583
Segment results (762,734) (43,767) 190,055 93,553 (522,893)
Amortisation
of intangible
assets - customer
base (152,235) - - - (152,235)
Unallocated
corporate expenses (515,572)
Finance income 367
Finance costs (549)
----------------
Loss before
income tax (1,190,882)
Income tax expense -
----------------
Loss for the
period (1,190,882)
Segment assets 6,815,865 2,897,187 1,615,752 - 11,328,804
Unallocated
assets 7,978,212
--------------
19,307,016
Additions to
non-current
assets - 3,896 160,922 - 164,818
Depreciation
and amortisation 196,498 6,440 46,008 - 248,946
5 REVENUE AND SEGMENT INFORMATION (CONTINUED)
Segmental information for the six months ended 30 June 2015 is
as follows:
Rest
of
North Asia the
America EMEA Pacific World Total
US$ US$ US$ US$ US$
Revenue from
external customers 5,027,990 4,150,050 865,212 549,066 10,592,318
Segment results (1,033,426) (1,265,246) 126,369 260,780 (1,911,523)
Amortisation
of intangible
assets - customer
base (235,996) - - - (235,996)
Unallocated
corporate expenses (340,924)
Finance income 498
Finance costs (834)
----------------
Loss before
income tax (2,488,779)
Income tax expense (3,540)
----------------
Loss for the
period (2,492,319)
Segment assets 5,080,464 2,873,820 1,365,021 40,002 9,359,307
Unallocated
assets 1,449,086
--------------
10,808,393
Additions to
non-current
assets 99,431 1,666 53,065 - 154,162
Depreciation
and amortisation 280,279 8,029 68,507 - 356,815
6 OPERATING LOSS
Operating loss is stated after charging the following:
Unaudited
Six months ended
30 June
2016 2015
US$ US$
Auditor's remuneration 71,549 76,775
Amortisation of intangible
assets 165,771 250,499
Depreciation on property,
plant and equipment 83,175 106,316
Employee benefit expenses 7,916,550 8,134,250
Legal and professional expenses 412,994 514,812
Marketing and promotion expenses 647,028 680,330
Operating lease rentals in
respect of leased premises 378,908 355,937
Other operating lease rentals 530,302 514,167
Outsourcing fee 613,161 1,047,170
Resell software rights 33,042 41,162
Travel and entertainment expenses 305,954 409,653
Other expenses 718,374 748,027
---------------- ----------------
Total cost of sales and selling
and operating expenses 11,876,808 12,879,098
Representing:
Cost of sales 1,576,233 2,021,335
Selling expenses 6,027,938 6,244,011
Operating expenses 4,272,637 4,613,752
---------------- ----------------
11,876,808 12,879,098
7 FINANCE COSTS, NET
Unaudited
Six months ended
30 June
2016 2015
US$ US$
Finance income:
* Interest income on bank deposits 367 498
-------------- --------------
Finance costs:
* Interest element of finance lease (549) (834)
-------------- --------------
Finance costs, net (182) (336)
8 LOSS PER SHARE
Basic
Basic loss per share is calculated by dividing the loss
attributable to owners of the Company by the weighted average
number of ordinary shares in issue during the period.
Unaudited
Six months ended
30 June
2016 2015
Loss attributable to equity
holders of the Company (US$) (1,190,882) (2,492,319)
Weighted average number of
ordinary shares in issue 51,221,190 38,917,530
Basic loss per share (US$
cents per share) (2.3) (6.4)
Diluted
Diluted loss per share is the same as basic loss per share since
the exercise of the outstanding share options would have an
anti-dilutive effect for the six months ended 30 June 2015 and
2016.
9 PROPERTY, PLANT AND EQUIPMENT
As at 30 June
2016 2015
US$ US$
Net book value at 1 January 260,030 270,171
Additions 157,698 142,041
Disposals (4,504) (2,193)
Depreciation for the period (83,175) (106,316)
Exchange differences (1,352) (1,122)
------------------ ------------------
Net book value at 30 June
(unaudited) 328,697 302,581
10 INTANGIBLE ASSETS
Customer Computer
Goodwill base software Total
US$ US$ US$ US$
Net book value
at 1 January
2016 1,147,553 1,420,864 22,188 2,590,605
Additions - - 7,120 7,120
Disposals - - - -
Amortisation
for the period - (152,235) (13,536) (165,771)
Exchange differences - - (24) (24)
---------------- ---------------- -------------- ----------------
Net book value
at 30 June 2016
(unaudited) 1,147,553 1,268,629 15,748 2,431,930
Net book value
at 1 January
2015 1,147,553 1,878,918 32,125 3,058,596
Additions - - 12,121 12,121
Disposals - - (202) (202)
Amortisation
for the period - (235,996) (14,503) (250,499)
Exchange differences - 7 (1) 6
---------------- ---------------- -------------- ----------------
Net book value
at 30 June 2015
(unaudited) 1,147,553 1,642,929 29,540 2,820,022
11 CASH AND BANK BALANCES
Unaudited
As at 30 June
2016 2015
US$ US$
Cash on hand 5,503 5,476
Cash at bank 10,895,212 3,490,718
Short-term bank deposits 40,050 40,054
---------------- ----------------
Cash and cash equivalents 10,940,765 3,536,248
---------------- ----------------
Restricted bank deposits with
original maturity of over
three months 250,000 -
--------------- ---------------
Total cash and bank balances 11,190,765 3,536,248
12 SHARE CAPITAL
Ordinary shares, issued and fully paid:
Unaudited
As at 30 June
2016 2015
No. of No. of
shares US$ shares US$
Movements in
ordinary shares
At 1 January 51,150,226 51,150 38,762,826 38,763
Issue of shares
to non-executive
directors (note
13(b)) 34,639 35 52,500 52
Issue of shares
upon exercise
of share options
(note a) 45,000 45 273,500 274
-------------------- -------------- -------------------- --------------
At 30 June 51,229,865 51,230 39,088,826 39,089
Note:
(a) During the period ended 30 June 2016, an aggregate of 45,000
share options (30 June 2015: 273,500) were exercised with proceeds
of US$13,660 (30 June 2015: US$95,335). The weighted average market
value per share at the date of exercise for these share options
exercised was GBP 60 pence (30 June 2015: GBP 80.4 pence).
13 EQUITY SETTLED SHARE-BASED PAYMENTS
(a) Share option scheme
Pursuant to the share option scheme (the "Plan") approved and
adopted on 18 September 2000, the Board of Directors of the Company
may offer eligible employees, directors and sales agents rights to
subscribe for shares of the Company. The Plan shall be valid and
effective for a period of ten years. Pursuant to an ordinary
resolution passed at the annual general meeting of the Company on
10 June 2011, the Plan expired on 17 September 2010 is renewed for
a further period of ten years, and is to expire on 16 September
2020 (the "Renewed Plan"). The maximum aggregate number of ordinary
shares of US$0.001 each which may be issued pursuant to the Renewed
Plan is 10,000,000 ordinary shares according to an ordinary
resolution passed at the annual general meeting of the Company on 9
June 2014. Options are granted at a price equal to the average
market price of the Company's shares on the date of grant. The
vesting period is ranged from one year to five years from the date
of grant. If the options remain unexercised ten years after the
date of grant, the options will expire. Options are forfeited if
the relevant option holder leaves the Group before the options
vest.
13 EQUITY SETTLED SHARE-BASED PAYMENTS (CONTINUED)
(a) Share option scheme (Continued)
The following table discloses the movements of the Company's
share options:
2016 2015
Number Weighted Number Weighted
of average of average
share exercise share exercise
options price options price
US$ US$
As at 1 January 2,989,000 0.840 4,276,000 0.876
Granted 2,480,000 0.802 550,000 1.126
Forfeited (134,000) 1.017 (1,467,000) 0.990
Exercised (45,000) 0.303 (273,500) 0.365
---------------- ----------------
As at 30 June 5,290,000 0.789 3,085,500 0.840
Exercisable as
at 30 June 1,780,416 0.653 1,066,250 0.558
(unaudited)
Share options outstanding during the periods ended 30 June 2016
and 30 June 2015 are as follows:
30 June 30 June
2016 2015
Number Number
of of
shares shares
Exercise price under under
Expiry date per share option option
24/05/2016 US$0.300 - 20,000
28/12/2016 US$0.300 44,000 49,000
12/02/2020 GBP0.18 80,000 80,000
06/12/2020 GBP0.215 250,000 250,000
24/01/2021 GBP0.1925 50,000 50,000
02/01/2022 GBP0.215 275,000 300,000
01/01/2023 GBP0.51 250,000 250,000
05/03/2023 GBP0.44 100,000 100,000
05/05/2023 GBP0.425 250,000 250,000
01/09/2023 GBP0.555 50,000 50,000
14/04/2024 GBP0.73 1,176,000 1,334,000
08/06/2024 GBP0.71 - 7,500
01/09/2024 GBP0.655 10,000 10,000
10/11/2024 GBP0.725 25,000 25,000
13/11/2024 GBP0.715 10,000 10,000
22/04/2025 GBP0.815 250,000 300,000
12/01/2026 GBP0.61 750,000 -
02/02/2026 GBP0.545 1,720,000 -
---------------- ----------------
5,290,000 3,085,500
13 EQUITY SETTLED SHARE-BASED PAYMENTS (CONTINUED)
(a) Share option scheme (Continued)
The fair values of share options granted during the period ended
30 June 2016 were calculated using the Binomial Option Pricing
Model. The inputs into the model were as follows:
Batch i ii iii
------------------ ----------- ------------------ -----------
Date of 13 January 3 February 3 February
grant 2016 2016 2016
Closing
price at
date of
grant (GBP) 0.61 0.545 0.545
Exercise
price (GBP) 0.61 0.545 0.545
Expected
volatility 51.68% 51.60% 51.60%
Expected
multiple 3 3 1.5
Risk-free
interest
rate 1.75% 1.52% 1.52%
Expected
annual dividend
yield 1.02% 1.15% 1.15%
Fair value
per share
option(GBP) 0.299 0.252 0.22
The expected volatility is based on the average of industry
annualised historical stock price volatility as at the date of
grant. The expected life is the expected lives of the options which
have been taken into account of early exercise behaviour of the
option holders.
(b) Pursuant to the terms and conditions of the letter of
appointment with the non-executive directors of the Company, an
aggregate of 34,639 (30 June 2015: 52,500) ordinary shares of the
Company were allotted to them as part of their remuneration package
during the period ended 30 June 2016. The fair values of these
shares amounting to US$30,518 and US$65,648 respectively.
(c) The Company recognised total expenses of US$317,056 and
US$86,772 relating to equity settled share-based payments in the
periods ended 30 June 2016 and 30 June 2015 respectively.
(d) Pursuant to the terms and conditions of the letter of
appointment with a non-executive director of the Company, an
aggregate of 15,750 (30 June 2015: Nil) ordinary shares of the
Company were allotted to him as part of his remuneration package
for his service during the period ended 30 Jun 2016. The fair value
of these 15,750 (30 June 2015: Nil) shares amounted to US$13,876
(30 June 2015: Nil). As at 30 Jun 2016, the shares had not been
issued to the director yet.
14 NOTES TO THE CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Reconciliation of loss before income tax to net cash
generated from/(used in) operations:
Unaudited
Six months ended
30 June
2016 2015
US$ US$
Loss before income tax (1,190,882) (2,488,779)
Adjustments for:
Amortisation of intangible
assets 165,771 250,499
Depreciation of property,
plant and equipment 83,175 106,316
Equity settled share-based
payments 317,056 86,772
Exchange (gain)/loss (168,922) 154,625
Finance income (367) (498)
Finance costs 549 834
Loss on disposal of property,
plant and equipment 3,190 2,193
Loss on disposal of intangible
assets - 202
---------------- ----------------
Changes in working capital (790,430) (1,887,836)
* Accounts and other receivables, prepayments and
deposits 3,799,042 3,946,838
* Accounts and other payables (1,589,692) (2,452,223)
* Deferred revenue (1,088,581) (851,463)
---------------- ----------------
Net cash generated from/(used
in) operations 330,339 (1,244,684)
(b) In the condensed consolidated statement of cash flows,
proceeds from disposal of property, plant and equipment
comprise:
Unaudited
Six months ended
30 June
2016 2015
US$ US$
Net book amount (Note 9) 4,504 2,193
Loss on disposal of property,
plant and equipment (3,190) (2,193)
---------------- ----------------
Proceeds from disposal of
property, plant and equipment 1,314 -
(c) In the condensed consolidated statement of cash flows,
proceeds from disposal of intangible assets comprise:
Unaudited
Six months ended
30 June
2016 2015
US$ US$
Net book amount (Note 10) - 202
Loss on disposal of intangible
assets - (202)
---------------- ----------------
Proceeds from intangible assets - -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DGGDCSUBBGLI
(END) Dow Jones Newswires
September 19, 2016 02:01 ET (06:01 GMT)
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