TIDMPEB
RNS Number : 7983W
Pebble Beach Systems Group PLC
28 April 2021
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the
publication of this announcement, the inside information is now
considered to be in the public domain for the purposes of MAR.
Pebble Beach Systems Group plc
Final Results for the year ended 31 December 2020
Pebble Beach Systems Group plc (AIM: "PEB", "Pebble" or the
"Group"), a leading global software business specialising in
playout automation and content management solutions for the
broadcast and streaming service markets, is pleased to announce its
final results for the year ended 31 December 2020.
Financial Headlines
2020 2019
-------------------------------------- --------------------- -----------------
Revenue GBP8.4m GBP11.2m
Gross profit GBP6.4m GBP8.3m
Gross margin 77% 74%
Adjusted EBITDA* GBP2.7m GBP3.8m
% of Revenue 32% 34%
Net profit for the year GBP1.3m GBP1.5m
Adjusted diluted earnings per share* 1.1p 1.8p
Basic earnings per share 1.0p 1.1p
Order Intake GBP7.8m GBP10.3m
Cash generated from operations GBP2.5m GBP2.4m
Net Debt GBP7.7m GBP8.4m
Headlines
-- Trading in the year impacted by COVID-19 with customers being
slow to make investment decisions impacting orders and revenue
-- Encouraging uptake in activity in the first quarter of 2021,
with orders up 86% in Q1 2021 compared with the same pre-COVID-19
quarter of 2020
-- Implemented cost savings to maintain the adjusted EBITDA
above 30% despite COVID-19 headwinds reducing revenue by 25%
-- Seamless transition to remote working as the UK Government imposed a series of lockdowns
-- Workforce capability maintained with no redundancies or use
of the Government furlough schemes
-- Reduced long-term bank debt by a further GBP1m
-- Extension to bank loan agreement securing the facility until 30 November 2022
*Adjusted EBITDA, a non-IFRS measure, is EBITDA before
non-recurring items and foreign exchange gains. Adjusted earnings
per share is calculated by excluding foreign exchange gains or
losses, amortisation of acquired intangibles, non-recurring items
and the share-based payment charge, after tax effects.
Peter Mayhead, Chief Executive Officer of Pebble Beach Systems
Group plc, said:
I am immensely proud with the way that our company delivered
excellent results during a difficult period. Our investment in
technology is key to the future success of our growth strategy and
we always look to our customers in the broadcast markets for
validation of our approach. Engagement with those customers
verifies that they are facing significant challenges as they look
to balance many competing pressures; the advent of remote
production, the reduction of barriers to entry as internet-based
platforms enable new entrants into the market, and increasing
content costs driven by hit shows from the major streaming
services.
When added to the growing competition for advertising spend from
social media, the need for innovation is clear. To sustain their
competitive edge, broadcasters must build on their historic ability
to channelise and distribute content to an audience whose platform
of choice is still overwhelmingly linear. They are doing this by
investing in technology that enables them to leverage the benefits
of digital-based workflows.
To that end in 2018, Pebble commenced work on developing our new
digital platform "Oceans". As an entirely new platform based on the
latest technologies, Oceans offers rapid application development,
remote operation, security, licensing flexibility, and storage
flexibility. At the same time, the platform has at its core, the
ability for our customers to continue to utilise their investment
in our current product suite.
I am delighted to report that in addition to releasing the
award-winning Oceans platform for customer installation during
2020, we also released Pebble Control. This solution expands our
portfolio to offer IP connection management, enabling our customers
to establish all-IP workflows, regardless of the scale of their
operations.
2020 was a challenging year for all, yet our commitment to
delivering on our annual plan in line with our company's values
enabled us to weather the storm without the need for staff
furlough, redundancies, or reduction in our technology investment.
We look forward to 2021 with a high level of optimism as we
continue to launch new applications to the market, broadening our
suite of cutting-edge, fully integrated, and scalable
capabilities.
- ends -
For further information please contact:
Peter Mayhead - CEO +44 (0) 75 55 59
David Dewhurst - CFO 36 02
finnCap Ltd (Nominated Adviser
and Broker )
Marc Milmo / Teddy Whiley - Corporate +44 (0) 207 220
Finance 0500
Tim Redfern / Sunila de Silva
- ECM
The Company is quoted on the LSE AIM market (PEB.L). More
information can be found at www.pebbleplc.com .
About Pebble Beach Systems
Pebble Beach Systems (trading as Pebble) is a world leader in
designing and delivering automation, integrated channel and
virtualised playout solutions, with scalable products designed for
applications of all sizes. Founded in 2000, Pebble has commissioned
systems in more than 70 countries, with proven installations
ranging from single up to over 150 channels in operation, and
around 2000 channels currently on air under the control of our
automation technology. An innovative, agile company, Pebble is
focused on discovering its customers' requirements and pain points,
designing solutions which will address these elegantly and
efficiently, and delivering and supporting these professionally and
in accordance with its users' needs.
Forward-looking statements
Certain statements in this announcement are forward-looking.
Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to be correct. Because
these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements. The Group undertakes no obligation to
update any forward-looking statements whether as a result of new
information, future events or otherwise. Nothing in this
announcement should be construed as a profit forecast.
CHAIRMAN'S STATEMENT
INTRODUCTION
In common with the majority of companies across all sectors,
2020 was a year like no other in our history. I am incredibly proud
of the robust way that the Group responded to the challenges
presented by the COVID-19 pandemic and continues to do so.
The year saw some customers cancel anticipated projects and
others delay investment decisions as they understandably focused on
addressing the challenges that COVID-19 created for their own
business. This led to an inevitable reduction in orders in the year
from GBP10.3 million to GBP7.8 million which had consequential
effect on revenue. However, as the new year started, we began to
see customers look forwards again which saw an upturn in customer
engagement, a growth in our pipeline and by the end of Q1 2021 our
orders were up 86% on the comparable period last year.
The opportunity for our technology remains significant with
COVID-19 having an undeniable impact on the broadcast sector. 2020
saw a return to traditional media as a source of news and
information, an increase in the need for remote production
technology and an increase in interest for forms of
subscription-based offerings. In this environment, cloud and
IP-based technology are seen as important tools to deliver against
these sector trends. The accelerated investment we have made in our
new digital platform, Oceans, has all the benefits of current
technologies enabling our customers to establish all-IP workflows
whilst retaining at its core the ability for our customers to
continue to utilize their investment in our existing installed
solutions. We believe the increased investment in our technology is
critical to our delivery of next generation cloud-based
solutions.
Coupled with the technology enhancements we were able to
progress in 2020, the year also saw the resilience of our operating
model being demonstrated. Our employees made a seamless transition
to homeworking continuing to be highly productive in meeting our
customers' needs. Our level of service and solutions delivery
ensured that all staff were fully engaged throughout the year and
no redundancies were considered. Additionally, we had no
requirement to make use of the Government furlough schemes. These
facts demonstrate the underlying strength of the Group.
Notwithstanding the ongoing investment in technology development,
we have also paid down another GBP1.0 million of our long-term
debt. We have maintained our discipline on costs and have been able
to deliver strong margins in unprecedented market conditions. We
are confident of growth in 2021 and in our ability to deliver
success for all our stakeholders.
FINANCIAL RESULTS
Revenue for 2020 of GBP8.4 million (2019: GBP11.2 million).
Recurring revenue from support contracts was up 10% to GBP4.0
million (2019: GBP3.6 million).
Gross profit in 2020 was GBP6.4 million at a margin of 77%
(2019: GBP8.3 million (74%)).
Adjusted EBITDA of GBP2.7 million in 2020 (2019: GBP3.8
million), before depreciation and amortisation, of GBP1.2 million
(2019: GBP2.0 million) are deducted.
The Group continues to view investment in the development of new
products and services as key to future growth and we will continue
to invest in innovation and new technologies. In 2020, Pebble Beach
Systems capitalised GBP1.3 million of development costs (amortised
GBP0.8 million), (2019: GBP1.0 million) (amortised GBP0.8
million).
Net finance costs were slightly lower in 2020 reflecting the
Group's pay-down of some of its revolving credit facility ("RCF")
offsetting more than the full year impact of an increased interest
rate of 3.53% (2019: 3.30%). The available RCF as at 31 December
2020 was reduced to GBP8.5 million, all of which had been drawn
fully down (2019: GBP9.5 million, of which GBP9.5 million had been
fully drawn down). Interest paid on the RCF was GBP0.3 million
(2019: GBP0.4 million).
The net profit for the year was GBP1.3 million (2019: GBP1.5
million).
DEBT
At 31 December 2020, the Group's net debt (excluding debt
related to leases following the implementation of IFRS 16) was
GBP7.7 million (2019: GBP8.4 million), comprising net cash of
GBP0.8 million (2019: GBP1.1 million) and the drawn down RCF from
Santander of GBP8.5 million (2019: GBP9.5 million).
We enjoy a close relationship with our bank and have kept up a
regular dialogue over the last 12 months during the COVID-19
pandemic. During 2020, we agreed a capital repayment holiday in
June 2020 under the Government's initiative, and we also agreed a
reduced level of repayment in December 2020. These actions were
taken to mitigate potential cashflow risks caused by the
uncertainties relating to the pandemic. During 2020 we repaid
GBP1.0 million of the RCF and did not take on any new debt
available under the Government loan support schemes. Post year end,
on 10 March 2021, we signed a 12-month extension to the current
GBP8.5 million loan agreement. The agreement secures the facility
until 30 November 2022 with revised quarterly repayments and EBITDA
covenant test levels reduced to reflect the current trading
environment. This agreement was based on the budget for 2021 and
forecasts for the following two years.
GOING CONCERN
The directors are required to assess the Company's and the
Group's ability to continue to trade as a going concern. The
details of this review are covered in the extract from the Notes to
the Financial Statements below. The Board concluded, from its
thorough assessment of the detailed forecasts, that the Group will
have sufficient resources to meet its liabilities during the review
period through to 30 June 2022 and that it is appropriate that the
Group and the Company prepare accounts on a going concern
basis.
BOARD CHANGES
As previously announced, we were pleased to make two new
appointments to the Board; on 1 May 2020, Richard Logan was
appointed to the Board as Non-Executive Director and on 5 October
2020, David Dewhurst was appointed as Chief Financial Officer.
TRADING OUTLOOK
The results achieved in 2020, in such unfavourable conditions,
came from the combined efforts of each and every member of staff.
Their determination and perseverance throughout 2020 has clearly
demonstrated that our strong culture of resilience, enthusiasm,
expertise, agility and dedication allows us to look forward with
optimism as the world returns to some level of normality.
2021 started slowly as customers continued their cautious
approach to investment decision making. As the first quarter has
unfolded customer confidence has returned and the order intake for
the first quarter closed at GBP4.0 million, up 86% compared with
GBP2.2 million in the same quarter of 2020, which was largely
pre-COVID-19. GBP1.5 million of these orders had been in the
pipeline for several months but it is reassuring to see that our
customers are emerging from the difficulties of 2020 and planning
expansions of their broadcast and streaming services.
With the vaccine programme gathering momentum around the world,
we feel confident that more customers will take the investment
decisions that have been delayed by the pandemic. Our pipeline
remains strong and has continued to grow in 2021 and reflects the
market opportunity for our technology. We are continuing with the
increased investment in our product suite which is critical to the
delivery of cloud-based solutions to work alongside our on-premise
solutions. The Board is confident that the Group is well positioned
to support our customers as they transition from traditional
broadcast infrastructure to more flexible IP-based
technologies.
John Varney
Non-Executive Chairman
For the year ended 31 December 2020
FINANCIAL REVIEW
For the year ended 31 December 2020
Continuing Operations
2020 2019 Change
GBP'm GBP'm %
----------------------- ------- ------- -------
Pebble Beach Systems 8.4 11.2 (25.1)
-------
Total Revenue 8.4 11.2 (25.1)
----------------------- ------- ------- -------
Pebble Beach Systems 3.3 4.5 (26.8)
PLC costs (0.6) (0.7) 11.8
----------------------- ------- ------- -------
Total adjusted EBITDA 2.7 3.8 (29.4)
----------------------- ------- ------- -------
Cash flows
The Group held cash and cash equivalents of GBP0.8 million at 31
December 2020 (2019: GBP1.1 million). The table below summarises
the cash flows for the year.
2020 2019
GBP'm GBP'm
------------------------------------------- ------ ------
Cash generated from operating activities 2.1 2.0
Net cash used in investing activities (1.4) (1.1)
Net cash used in financing activities (1.0) (1.1)
Net decrease in cash and cash equivalents (0.3) (0.2)
Cash and cash equivalents at 1 January 1.1 1.3
------------------------------------------- ------ ------
Cash and cash equivalents at 31 December 0.8 1.1
------------------------------------------- ------ ------
As at 31 December 2020 net debt was GBP7.7 million (cash GBP0.8
million and bank debt of GBP8.5 million). At the end of March 2021,
net debt had reduced to GBP7.1 million. The Group was using GBP8.5
million of its available facilities in December 2020.
Foreign exchange
The principal exchange rates used by the Group in translating
overseas profits and net assets into sterling are set out in the
table below.
Average Average Year end Year end
rate rate rate rate
Rate compared to GBP sterling 2020 2019 2020 2019
------------------------------ ------- ------- -------- --------
US dollar 1.284 1.277 1.365 1.321
------------------------------ ------- ------- -------- --------
Risk management
The Board regularly reviews the full range of business risks
facing the Group. The approach adopted is to identify, evaluate and
manage the likely impact of risk on the Group's business
objectives. Where the risks are unavoidable, they are managed
through business controls and where appropriate through insurance
and treasury activities.
The Group has a programme of regular risk assessment, which
incorporates internal control reviews of both a financial and
non-financial nature. A process of continuous review has been in
place throughout the year at an operating company level to consider
the risk environment and the effectiveness of controls. The results
of reviews, initiatives and progress on implementing control
improvements are regularly reported to the Board.
Environmental, Social and Governance (ESG)
The Group is committed to ESG considerations and the Board
understands that these criteria are an increasingly important
component of investors' evaluation of companies in which they want
to invest. In addition to our robust governance, the Board takes
regular account of the significance of social and environmental
matters.
CONSOLIDATED GROUP INCOME STATEMENT
for the year ended 31 December 2020
2020 2019
Notes GBP000 GBP000
Revenue 3 8,393 11,200
Cost of sales (1,964) (2,931)
-------- --------
Gross profit 6,429 8,269
Sales and marketing expenses (1,687) (2,044)
Research and development expenses (1,263) (1,298)
Administrative expenses (1,870) (2,247)
Foreign exchange gains/(losses) 15 (71)
Other expenses (156) (889)
Operating profit 4 1,468 1,720
----------------------------------------------- ------ -------- --------
Operating profit/ is analysed as:
Adjusted earnings before interest, tax,
depreciation and amortisation 2,658 3,765
Exchange gains/(losses) credited/(charged)
to the income statement 15 (71)
----------------------------------------------- ------ -------- --------
Earnings before interest, tax, depreciation
and amortisation (EBITDA) 2,673 3,694
----------------------------------------------- ------ -------- --------
Depreciation (234) (238)
Amortisation and impairment of acquired
intangibles (156) (889)
Amortisation of capitalised development
costs (815) (847)
--------
Finance costs 5 (374) (393)
Finance income 5 1 2
Profit before tax 1,095 1,329
Tax 6 199 82
-------- --------
Profit for the year being loss attributable
to owners of the parent 1,294 1,411
Net result from discontinued operations - 39
-------- --------
Net result for the year 1,294 1,450
Earnings per share from continuing operations
attributable to the owners of the parent
during the year
Basic earnings per share 7 1.0p 1.1p
Diluted earnings per share 7 1.0p 1.1p
----------------------------------------------- ------ -------- --------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2020
2020 2019
GBP000 GBP000
--------------------------------------------- ------- -------
Profit for the financial year 1,294 1,450
Other comprehensive income - items that
may be reclassified subsequently to profit
or loss:
Exchange differences on translation of
overseas operations
- continuing operations 26 19
Total profit for the year attributable
to owners of the parent 1,320 1,469
---------------------------------------------- ------- -------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the year ended 31 December 2020
Capital
Ordinary Share redemption Merger Translation Accumulated
shares premium reserve reserve reserve losses Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 1 January 2019 3,115 6,800 617 29,778 (195) (46,453) (6,338)
Share based payments: value
of employee services - - - - - 27 27
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Transactions with owners - - - - - 27 27
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Retained profit for the year - - - - - 1,450 1,450
Exchange differences on translation
of overseas operations - - - - 19 - 19
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Total comprehensive income
for the period - - - - 19 1,450 1,469
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 31 December 2019 3,115 6,800 617 29,778 (176) (44,976) (4,842)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 1 January 2020 3,115 6,800 617 29,778 (176) (44,976) (4,842)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Share based payments: value
of employee services - - - - - 12 12
Unclaimed dividends - - - - - 44 44
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Transactions with owners - - - - - 56 56
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Retained profit for the year - - - - - 1,294 1,294
Exchange differences on translation
of overseas operations - - - - 26 - 26
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
Total comprehensive income
for the period - - - - 26 1,294 1,320
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
At 31 December 2020 3,115 6,800 617 29,778 (150) (43,626) (3,466)
------------------------------------ -------- -------- ------------ --------- ------------ ----------- --------
CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
2020 2019
Notes GBP000 GBP000
----------------------------------------------- ------ --------- ---------
Assets
Non-current assets
Intangible assets 5,001 4,671
Property, plant and equipment 1,208 1,182
Deferred tax assets - 3
--------- ---------
6,209 5,856
--------- ---------
Current assets
Inventories 148 140
Trade and other receivables 3,125 3,468
Cash and cash equivalents 826 1,144
--------- ---------
4,099 4,752
Liabilities
Current liabilities
Financial liabilities - borrowings 1,800 1,520
Trade and other payables 4,059 4,466
Lease liabilities - current 145 139
--------- ---------
6,004 6,125
--------- ---------
Net current liabilities (1,905) (1,373)
--------- ---------
Non-current liabilities
Financial liabilities - borrowings 6,750 8,030
Lease liabilities - non-current 1,020 1,046
Deferred tax liabilities - 249
7,770 9,325
--------- ---------
Net liabilities (3,466) (4,842)
----------------------------------------------- ------ --------- ---------
Equity attributable to owners of the parent
Ordinary shares 9 3,115 3,115
Share premium account 9 6,800 6,800
Capital redemption reserve 9 617 617
Merger reserve 29,778 29,778
Translation reserve (150) (176)
Retained earnings (43,626) (44,976)
--------- ---------
Total deficit (3,466) (4,842)
----------------------------------------------- ------ --------- ---------
CONSOLIDATED GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2019
2020 2019
Notes GBP000 GBP000
------------------------------------------- ------ -------- --------
Cash flows from operating activities
Cash generated from operations 8 2,484 2,423
Interest paid (374) (393)
Taxation paid (46) (38)
-------- --------
Net cash from operating activities 2,064 1,992
-------- --------
Cash flows from investing activities
Interest received 1 2
Purchase of property, plant and equipment (107) (61)
Expenditure on capitalised development
costs (1,301) (985)
Net cash used in investing activities (1,407) (1,044)
-------- --------
Cash flows from financing activities
Net cash used in repayment of financing
activities 10 (1,000) (1,100)
Net cash used in financing activities (1,000) (1,100)
-------- --------
Net decrease in cash and cash equivalents
and overdrafts (343) (152)
Effect of foreign exchange rate changes 10 25 27
-------- --------
Cash and cash equivalents and overdrafts
at 1 January 1,144 1,269
Cash and cash equivalents and overdrafts
at 31 December 826 1,144
-------- --------
Net debt comprises:
Cash and cash equivalents and overdrafts 826 1,144
Borrowings (8,550) (9,550)
-------- --------
Net debt at 31 December 10 (7,724) (8,406)
------------------------------------------- ------ -------- --------
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. GENERAL INFORMATION
The Pebble Beach Systems Group is a leading global software
business specialising in solutions for playout automation, and
content serving customers in the broadcast markets.
The Company is a public limited company and is quoted on the
Alternative Investment Market (AIM) of the London stock exchange.
The Company is incorporated and domiciled in the UK. The address of
its registered office is 12 Horizon Business Village, 1 Brooklands
Road, Weybridge, Surrey, KT13 0TJ.
The registered number of the Company is 04082188.
This results announcement was approved for issue at close of
business on 27 April 2021.
2. BASIS OF PREPARATION
The Group financial statements have been prepared on a going
concern basis under the historical cost basis of accounting, except
where fair value measurement is required under IFRS as described
below and in accordance with International Financial Reporting
Standards (IFRS), and interpretations issued by the IFRS
Interpretations Committee (IFRS IC) and the Companies Act 2006
applicable to companies reporting under IFRS.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Group financial
statements are disclosed in note 4 of the Group financial
statements.
During the current reporting year there were no new standards or
amendments which had a material impact on the net assets of the
Group. Standards or amendments issued but not yet effective are not
expected to have a material impact on the net assets of the
Group.
The financial statements for the years ended 31 December 2020
and 31 December 2019, upon which the auditors issued unqualified
opinions, also had no statement under section 498(2) or (3) of the
Companies Act 2006.
GOING CONCERN
The directors are required to assess the Company's and the
Group's ability to continue to trade as a going concern.
At 31 December 2020, the Group's net debt was GBP7.7 million
(2019: GBP8.4 million), comprising net cash of GBP0.8 million
(2019: GBP1.1 million) and the drawn down RCF from Santander of
GBP8.5 million (2019: GBP9.5 million).
We enjoy a close relationship with our bank and have kept up a
regular dialogue over the last 12 months during the COVID-19
pandemic. During 2020, we agreed a capital repayment holiday in
June 2020 under the Government's initiative, and we also agreed a
reduced level of repayment in December 2020. These actions were
taken to mitigate potential cashflow risks caused by the
uncertainties relating to the pandemic. During 2020 we repaid
GBP1.0 million of the RCF and did not take on any new debt
available under the Government loan support schemes. On 10 March
2021, we signed a 12-month extension to the current GBP8.5 million
loan agreement. The agreement secures the facility until 30
November 2022 with revised quarterly repayments and EBITDA covenant
test levels reduced to reflect the current trading environment.
This agreement was based on the budget for 2021 and forecasts for
the following two years.
In order to assess the appropriateness of preparing these
financial statements on a going concern basis, management prepared
detailed projections of the consolidated income statements, balance
sheets and cash flow statements through to 30 June 2022. The
starting point was the budget for 2021 approved by the Board and
the forecast prepared for the above bank facility review, through
to June 2022. A stress test scenario was then created to look only
at existing orders and the current order pipeline. The evaluation
was divided between new project orders and service support
contracts. For new project orders in 2021, individual existing
opportunities currently weighted at 50% and higher in the
opportunity pipeline were evaluated in detail and included where it
was felt that there was a high likelihood of success. For 2022
project revenue, the historically high gross pipeline value was
taken, and weighted based on the historic conversion rates achieved
in 2020. The support contract revenue was assessed based on
existing renewed contracts, where revenue is recognized over the
time period of the contract and historic renewal rates for support
contracts expiring during 2021. A feature of the COVID-19 pandemic
has been delayed decision making by our customers. Sensitivity
analysis was therefore performed on the impact of further delays to
decision making on the largest five opportunities with a high
likelihood of success, in our existing pipeline. The outcome of
this was that there would not be any potential going concern issues
for the Group.
The Group did not make any redundancies nor place any staff on
furlough as the management team navigated a path through the impact
of the pandemic. The business made an effective switch to remote
working and this will continue beyond the time when restrictions
are lifted as many employees have embraced the work life balance
choices that they now enjoy. The remote working practices have been
extended and refined during the last year and productivity has been
high, as any previously experienced delays whilst waiting for
clients on site, can be mitigated as our engineers can switch to
another project until the client is ready.
The Board has concluded, from its thorough assessment of the
detailed forecasts, that the Group will have sufficient resources
to meet its liabilities during the review period through to 30 June
2022 and that it is appropriate that the Group and the Company
prepare accounts on a going concern basis .
3. SEGMENTAL REPORTING
The Group's internal organisational and management structure and
its system of internal financial reporting to the Board of
Directors comprise of Pebble Beach Systems Limited and PLC costs.
The chief operating decision-maker has been identified as the
Board.
The Board reviews the Group's internal financial reporting in
order to assess performance and allocate resources. Management have
therefore determined that the operating segments for the Group will
be based on these reports.
The Pebble Beach Systems Limited business is responsible for the
sales and marketing of all Group software products and
services.
The table below shows the analysis of Group external revenue and
operating profit from continuing operations by business
segment.
Pebble PLC Total
Beach Systems costs GBP000
----------------------------------------------- --------------- -------- --------
Year to 31 December 2020
Broadcast 8,393 - 8,393
Total revenue 8,393 - 8,393
--------------- -------- --------
Adjusted EBITDA 3,234 (576) 2,658
Depreciation (234) - (234)
Amortisation of acquired intangibles (156) - (156)
Amortisation of capitalised development
costs (815) - (815)
Exchange (losses)/gains (3) 18 15
Finance costs (40) (334) (374)
Finance income 1 - 1
Intercompany finance income/(costs) 217 (217) -
--------------- -------- --------
Profit/(loss) before taxation 2,204 (1,109) 1,095
Taxation (152) 351 199
--------------- -------- --------
Profit/(loss) for the year being attributable
to owners of the parent 2,052 (758) 1,294
Year to 31 December 2019
Broadcast 11,200 - 11,200
Total revenue 11,200 - 11,200
--------------- -------- --------
Adjusted EBITDA 4,418 (653) 3,765
Depreciation (238) - (238)
Amortisation of acquired intangibles (889) - (889)
Amortisation of capitalised development
costs (847) - (847)
Exchange (losses)/gains (78) 7 (71)
Finance costs (42) (351) (393)
Finance income 2 - 2
Intercompany finance income/(costs) 128 (128) -
--------------- -------- --------
Profit/(loss) before taxation 2,454 (1,125) 1,329
Taxation 84 (2) 82
--------------- -------- --------
Profit/(loss) for the year being attributable
to owners of the parent 2,538 (1,127) 1,411
Geographic external revenue analysis
The revenue analysis in the table below is based on the
geographical location of the customer for continuing operations of
the business.
2020 2019
Total Total
GBP000 GBP000
---------------- --------- ---------
By market
UK & Europe 4,855 5,272
North America 842 982
Latin America 333 1,602
Middle East
and Africa 2,114 3,114
Asia / Pacific 249 230
8,393 11,200
---------------- --------- ---------
Net assets
The table below summarises the net assets of the Group by
division. Balance sheet reporting is disclosed by the divisional
assets and liabilities of the Group as this is consistent with the
presentation of internal information provided to the Executive
Management Board and the Board of Directors.
2020 2019
GBP000 GBP000
---------------------- -------- --------
By division:
Pebble Beach Systems 5,018 4,977
PLC costs (8,484) (9,819)
(3,466) (4,842)
---------------------- -------- --------
4. OPERATING PROFIT
The following items have been included in arriving at the
operating profit for the continuing business:
2020 2019
GBP000 GBP000
------------------------------------------------------ -------- --------
Depreciation of property, plant and equipment 234 238
Amortisation of acquired intangibles 156 889
Exchange (gains)/losses (credited)/charged to
profit and loss (15) 71
Research and development expenditure expensed
in the year which includes: 1,263 1,298
* Amortisation of capitalised development costs 815 847
------------------------------------------------------ -------- --------
5. FINANCE COSTS - NET
2020 2019
GBP000 GBP000
------------------------------------------- --------- ---------
Interest expense for bank borrowing 334 351
Interest expense for leasing arrangements 40 42
Finance costs 374 393
Finance income (1) (2)
Finance costs - net 373 391
------------------------------------------- --------- ---------
Finance income is derived from cash held on deposit.
6. INCOME TAX EXPENSE
2020 2019
GBP000 GBP000
--------------------------------------- -------- --------
Current tax
UK corporation tax - -
Foreign tax - current year 35 50
Adjustments in respect of prior years 11 -
--------------------------------------- -------- --------
Total current tax 46 50
--------------------------------------- -------- --------
Deferred tax
UK corporation tax (276) (132)
Effect of changes in UK tax rate 26 -
Adjustments in respect of prior years 5 -
--------------------------------------- -------- --------
Total deferred tax (245) (132)
--------------------------------------- -------- --------
Total taxation (199) (82)
--------------------------------------- -------- --------
At Budget 2020, the government announced that the corporation
tax rate for the years starting 1 April 2020 and 2021 would remain
at 19 per cent. Deferred taxes at the balance sheet date have been
measured using these enacted tax rates and reflected in these
financial statements.
7. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
For diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The dilutive shares are those
share options granted to employees where the exercise price is less
than the average market price of the Company's ordinary shares
during the year. The average market value of the Company's shares
for the purpose of calculating the dilutive effect of share options
was based on quoted market prices for the year during which the
options were outstanding.
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below.
2020 2019
Weighted Weighted
average average Earnings
number Earnings number per
Earnings of shares per share Earnings of shares share
GBP000 000s pence GBP000 000s pence
----------------------------- --------- ----------- ----------- --------- ----------- ----------
Basic earnings per share
Profit attributable
to continuing operations 1,294 1.0p 1,411 1.1p
Profit attributable
to discontinued operations - 0.0p 39 0.0p
----------------------------- --------- ----------- ----------- --------- ----------- ----------
Basic earnings per share 1,294 124,477 1.0p 1,450 124,477 1.1p
----------------------------- --------- ----------- ----------- --------- ----------- ----------
Diluted earnings per
share
Profit attributable
to continuing operations 1,294 1.0p 1,411 1.1p
Profit attributable
to discontinued operations - 0.0p 39 0.0p
----------------------------- --------- ----------- ----------- --------- ----------- ----------
Diluted earnings per
share 1,294 126,862 1.0p 1,450 124,577 1.1p
----------------------------- --------- ----------- ----------- --------- ----------- ----------
Potential ordinary shares were non-dilutive in prior years
because they would decrease the loss per share from continuing
operations.
Adjusted earnings
The directors believe that adjusted EBITDA, adjusted earnings
and adjusted earnings per share provide additional useful
information on underlying trends to shareholders. These measures
are used by management for internal performance analysis and
incentive compensation arrangements. The term "adjusted" is not a
defined term used under IFRS and may not therefore be comparable
with similarly titled profit measurements reported by other
companies. The principal adjustments are made in respect of the
amortisation of acquired intangibles, share based payment expense,
non-recurring items and exchange gains or losses charged to the
income statement and their related tax effects. This definition has
been updated this year and the comparative figure for 2019 is
restated.
The reconciliation between reported and underlying earnings and
basic earnings per share is shown below:
2020 2019
---------------------------------------- ------------------- --- ---------------
Earnings Earnings
GBP000 GBP000
Pence Pence
Reported profit per share 1,294 1.0p 1,450 1.1p
Amortisation of acquired intangibles
after tax 126 0.1p 738 0.6p
Share based payment expense 12 0.0p 27 0.0p
Exchange (gains)/losses (12) 0.0p 58 0.1p
--------- ------- ----------- ----------
Adjusted profit per share - continuing
operations 1,420 1.1p 2,261 1.8p
---------------------------------------- --------- ------- ----------- ----------
8. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of profit before taxation to net cash flows from
operating activities.
2020 2019
GBP000 GBP000
----------------------------------------------------- -------- --------
Profit before tax - continuing operations 1,095 1,329
Profit before tax - discontinued operations - 39
----------------------------------------------------- -------- --------
Total profit before tax 1,095 1,368
Depreciation of property, plant and equipment 234 238
Loss on disposal of property, plant and equipment - 1
Amortisation and impairment of development costs 815 847
Amortisation and impairment of acquired intangibles 156 889
Share-based payment expense 12 27
Finance income (1) (2)
Finance costs 374 393
(Increase)/decrease in inventories (8) 70
Decrease/(increase) in trade and other receivables 343 (1,077)
(Decrease)/Increase in trade and other payables (536) 36
Decrease in provisions - (367)
----------------------------------------------------- -------- --------
Net cash generated from operating activities 2,484 2,423
----------------------------------------------------- -------- --------
9. CALLED UP SHARE CAPITAL, SHARE PREMIUM AND CAPITAL REDEMPTION RESERVE
Number of Share Share Premium Capital Total
shares Capital redemption
GBP000 reserve
000 GBP000 GBP000 GBP000
--------------------- ---------- --------- -------------- ------------ --------
At 1 January 2020 124,603 3,115 6,800 617 10,532
Share issues - - - - -
At 31 December 2020 124,603 3,115 6,800 617 10,532
--------------------- ---------- --------- -------------- ------------ --------
10. NET FUNDS
Reconciliation of decrease in cash and cash equivalents to
movement in net cash:
Net cash and Other Total
cash equivalents borrowings net cash
GBP000 GBP000 GBP000
------------------------------------------ ------------------ ------------ ----------
At 1 January 2020 1,144 (9,550) (8,406)
Cash flow for the year before financing 657 - 657
Movement in borrowings in the year (1,000) 1,000 -
Exchange rate adjustments 25 - 25
Cash and cash equivalents at 31 December
2020 826 (8,550) (7,724)
------------------------------------------ ------------------ ------------ ----------
11. POST BALANCE SHEET EVENTS
On 10 March 2021, an extension of the current loan agreement was
signed with our bank. The revision secures the facility until 30
November 2022, with reduced banking covenants and repayment
schedules to reflect the current trading environment.
In the Spring Budget 2021, the Government announced that from 1
April 2023 the corporation tax rate would increase to 25 per cent.
As the proposal to increase the rate to 25 per cent had not been
substantively enacted at the balance sheet date, its effects are
not included in these financial statements. However, it is likely
that the overall effect of the change, had it been substantively
enacted by the balance sheet date, would be no change to the tax
charge for the period nor to the deferred tax liability.
The Board is pleased to confirm that following the publication
of its audited results for the year ended 31 December 2020, the
annual report and financial statements will be posted to
shareholders by 21 May 2021 and a copy will also be available to
download from the Group's website at www.pebbleplc.com.
Ends
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FR SEDSSAEFSEFL
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April 28, 2021 02:00 ET (06:00 GMT)
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