Imaginatik PLC IMTK Half Yearly Report
Imaginatik PLC (IMTK) - Half Yearly Report
RNS Number : 6311R
Imaginatik PLC
21 November 2012
21 November 2012
Imaginatik Plc
("Imaginatik" or the "Company")
Interim Results
Imaginatik plc (AIM: IMTK.L), a leading provider of enterprise innovation
services including a range of technology products and consultancy, announces
its unaudited interim results for the half year ended 30 September 2012.
Key points
· Revenue increased by 8% to £1.75 million (H1 2011: £1.62 million)
· Operating losses before share option costs reduced to £0.36 million (H1
2011: £0.43 million)
· Substantial number of new customer wins: 17 new customers on either
annual or pilot contracts (H1 2011: 6)
· Increasing proportion of customers taking consultancy services
alongside software offering including Mead Johnson, Proctor & Gamble and The
Society of Petroleum Engineers
· Successful conclusion of litigation
· Placing in June 2012 raising £1.0 million before expenses
Matt Cooper, Executive Chairman of Imaginatik, commented, "We believe we have
now entered the 'age of innovation' - a unique time in the world of business
when globalisation, the availability of data and the fast moving nature of
product development means that innovation is a required business competence to
survive. It is now imperative that companies understand how to innovate and
adapt to these fast-changing markets, yet many companies do not have the
internal processes or know how to make it a fundamental part of their
operations. This is our opportunity and our challenge.
Trading in the second half has begun well and, with a strong pipeline of
opportunities and renewals for the second half, we are confident of a
successful outcome for the year as a whole."
For further information please contact:
Imaginatik plc Tel: 020 7917 2975
Matt Cooper, Executive Chairman / Shawn Taylor, CFO
Northland Capital Partners Limited Tel: 020 7796 8800
Edward Hutton / Tim Metcalfe
Newgate Threadneedle Tel: 020 7653 9850
Caroline Evans-Jones / Hilary Millar
About Imaginatik
Imaginatik provides a range of Innovation solutions comprised of consultancy,
enterprise software and program management to deliver innovation results to
companies such as The World Bank, The Chubb Group of Insurance Companies,
Boeing, Pfizer, Goodyear, Paccar, Kellogg and Cargill. Few companies possess
the internal capability to consistently generate fresh ideas, identify those
worth pursuing and reliably transform them into real, value-enhancing assets.
Imaginatik's mission is to help these companies build sustainable innovation
competencies.
Imaginatik is a public company whose shares are traded on the AIM market of
the London Stock Exchange (LSE:IMTK.L) and is a World Economic Forum
Technology Pioneer with offices in Boston, MA, and Fareham, UK. For more
information visit www.imaginatik.com.
Introduction
We believe we have now entered the 'age of innovation' - a unique time in the
world of business when globalization, the availability of data and the fast
moving nature of product development means that innovation is a required
business competence to survive. It is now imperative that companies understand
how to innovate and adapt to these fast-changing markets.
We continue to see evidence that companies are recognising this requirement;
for example the role of the Chief Innovation Officer within a large enterprise
is becoming more commonplace and companies are now seeking external assistance
in developing innovation strategies. While many are making good progress in
this respect there remains substantial scope for improvement and this presents
a significant opportunity for us.
Over the past decade Imaginatik has built the skills, competencies and
insights to understand how innovation is best achieved at scale. It is not the
domain of a single individual, but rather best accomplished through harnessing
the collective wisdom of a company's employees, customers and partners. Via a
series of processes, innovation can be learned, institutionalized and then
repeated. Our mission is to ensure innovation becomes embedded within our
customers, achieved through a mixture of sophisticated software and market
leading consultancy.
We continue to make good progress in the execution of our strategy to provide
a complete innovation solution comprising software and consultancy, and are
seeing a growing amount of evidence vindicating our strategic direction. We
continue to receive market validation from industry research houses, such as
Forrester, from the increasing proportion of customers taking consultancy
services alongside our software offering and the accelerated pace at which we
have added new customers. We have also been pleased by the positive response
to our increased activities in Europe, securing several new customers, with
many more opportunities in the pipeline.
We believe we now have the right strategy, the right people, the most complete
technology solution and the broadest consultancy offering in the market. We
are now moving into the next phase which is a focus on the broader marketing
of our business, raising awareness of our offering in our two key markets of
North America and Europe.
Financial Review
Total revenue for the half year ended 30 September 2012 increased by 8% to
£1.75 million (H1 2011: £1.62 million). During the period, 7% of revenue was
generated from up-selling our software and consultancy services into existing
customers, 69% from selling into new customers, and 24% from recurring
business (H1 2011: 18%: 29%: 53% respectively). We secured a significantly
higher level of new customers during the period, adding 17 (H1 2011: 6), with
9 of these being on annual contracts (H1 2011: 3).
The US continues to be our core market, with revenues generated from the
region in the period accounting for 93% (H1 2011: 98%). The European market
offers significant opportunity and, following an increased presence in the
region, we are encouraged by the progress achieved in the period. Revenue from
the European market grew to 7% (H1 2011: 2%).
Investment into our technology and software platform remains a key focus of
the Company, and we have continued to invest in the development of our
software platform, including improved functionality, multi-lingual
capabilities and connectors for various corporate platforms. During the
period the Company has capitalised development costs amounting to £0.12m, (H1
2011: £nil) as the Company now meets the necessary accounting requirements set
out in IAS38: Intangible assets.
We have once again secured an R&D tax credit from HMRC of £0.13 million (H1
2011: £0.11 million) reflecting the pioneering nature of the research and
development work we undertake. This is reflected in the taxation line in the
income statement.
Administrative expenses for the period were £1.99 million, a slight increase
on the previous year (H1 2011: £1.96 million). This was a result of the
addition of senior headcount in the US and Europe but mitigated by the
capitalisation of certain development costs referred to previously.
Operating losses before share-based payments have again been reduced to £0.36
million (2011: £0.43 million) and is a function of both the increase in
revenues and the stable cost base.
Cash outflows from operating activities narrowed to £1.01 million in the first
six months of the year (H1 2011: £1.20 million). As a result of the strong
close to the period, the Company had short term receivables amounting to £1.74
million (H1 2011: £1.62 million) and longer term receivables amounting to
£0.34 million (H1 2011: nil). The longer term receivables arose as a result of
a number of multiyear contracts entered into during the half. The vast
majority of the short term receivables are expected to be received in the
second half of the year.
During the period the Company successfully concluded its litigation against
the former CEO Mark Turrell. In a concluding hearing on the 27 September 2012
the High Court granted the Company and Matt Cooper an order over all of Mr.
Turrell's 64.4 million shares in Imaginatik plc. Those shares have been split
in an equitable manner between the Company and Matt Cooper, as a result the
Company has an order over 54.1 million shares. It is the Company's intention
to dispose of the shares in an orderly manner. Under IAS 32 the shares may
only be recognized as an asset to the Company at the point of disposal.
The Company completed a placing of new ordinary shares with institutional and
other investors in June 2012 raising £1.0 million before expenses. The net
proceeds are being used to expand the Company's US based sales team, to add
further consultancy capacity in both the US and European markets, to further
develop the Company's technology and to develop our branding and marketing
efforts.
Operational Review
Customers
During the period we added 17 new customers, compared to six in the first half
of the previous year. Of these, nine were annual contracts, including Air
Products and Chemicals, Inc. and Chartis Global Services, Inc., and five were
pilot projects, including MillerCoors and Merck & Co., Inc., with the balance
being consultancy-led engagements.
The general economy stills poses a challenge, as evidenced by the loss of
three customers in the period due to budgetary constraints. Each of these
contracts was based on our 'old model' with no consultancy support and we are
confident that as an increasing number of our customers rely on Imaginatik to
provide them with full innovation capabilities, we will increase the
resilience of our customer base.
Technology
The investments we have made in our technology platform over the past year
have been directed towards the expansion of our product offerings. We now have
a suite of products which spans the innovation spectrum. Starting with
Discovery Suite, which helps customers identify where to focus their
innovation efforts, through its 'four lens' methodology, through to the core
platform, Innovation Central, which enables companies to engage the collective
brain power of their employees, partners and customers in innovation
challenges, and finally to Results Engine which allows organizations to manage
and track projects resulting in implemented ideas.
Substantial progress has also been made during this period in incorporating
multi-lingual capabilities into the platform and establishing connectors into
some of the fastest growing corporate platforms, such as SharePoint, Jive and
Yammer. Both of these initiatives are significantly increasing our addressable
market.
Consultancy
We are experiencing solid growth in the number of contracts for consultancy
where we provide both guidance to senior management on their long-term
innovation strategies and more targeted innovation support in the form of new
product, marketing and brand positioning projects. Contracts in the period
include with Mead Johnson, Proctor & Gamble and The Society of Petroleum
Engineers. In addition, most new annual contracts and renewals now include
some element of operational consultancy, to ensure successful implementation
of challenges. The period also saw the Company secure the first annual
technology contract generated from a consultancy lead. We believe these
factors are a strong endorsement of our strategy.
The focus in the second half of the year will be the further integration of
our technology and consultancy offering. This includes the development and
launch of a completely new innovation offering that is supported by a new
technology for creative collaboration and insight generation. It will also
include a suite of new innovation programmes for senior management and
innovation teams designed to strengthen their innovation competency.
Sales and Marketing
Web-based lead generation continues to be a significant contributor to our
sales pipeline and as a result much focus in the first half of the year has
been on the development of a new website to enhance our web presence. This
project is approaching completion and is expected to be launched in the second
half of the year. We continue to host well attended webinars on a regular
basis, with four taking place in the first half of the year. These are proving
to be a useful lead generation tool. This will be continued in the second half
of the year, supplemented by our annual Innovation Leaders Forum which will
take place in Boston the early part of 2013. In order to develop the business
further we have secured relationships with various third parties to assist
with lead generation in both the US and Europe which is delivering additional
opportunities.
Outlook
We continue to believe the prospects for Imaginatik to be significant.
Innovation is now a crucial business skill and yet many companies do not have
the internal processes or know how to make it a fundamental part of their
operations. This is our opportunity and our challenge.
Trading in the second half has begun well and, with a strong pipeline of
opportunities and renewals for the second half, we are confident of a
successful outcome for the year as a whole.
Condensed unaudited consolidated interim statement of Comprehensive Income
For the six months ended 30 September 2012
Unaudited 6 Unaudited 6 Audited Year to
months to 30 months to 30 31 March 2012
Sept Sept
2012 2011
Note £'000 £'000 £'000
Revenue 1,754 1,624 3,447
Cost of sales (170) (158) (321)
Gross profit 1,584 1,466 3,126
Administrative expenses (1,997) (1,958) (4,211)
Operating loss before financing (413) (492) (1,085)
and taxation
Operating loss before share (363) (434) (976)
option costs
Share option costs (50) (58) (109)
Finance income/(costs) - - (8)
Loss on ordinary activities (413) (492) (1,093)
before taxation
Taxation 131 108 108
Loss on ordinary activities for (282) (384) (985)
the period
Basic and diluted loss per 3 (0.04) (0.15)
share (p) (0.28)
All amounts are attributable to equity holders of the parent, and all arise
from continuing operations. No amounts were recognised directly in equity,
and therefore no separate statement of comprehensive income has been
presented.
Condensed unaudited consolidated interim Statement of Financial Position
As at 30 September 2012
Unaudited Unaudited
30 Sept 30 Sept
Audited 31 March
2012 2011 2012
Note £'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and 46 70
equipment 51
Intangible assets 161 73 51
Trade & other 346 - 106
receivables
553 143 208
Current assets
Trade and other 1,735 1,624
receivables 1,034
Cash and cash 305 244
equivalents 543
2,040 1,868 1,577
Total assets 2,593 2,011 1,785
EQUITY AND LIABILITIES
Equity
Issued capital 341 267 321
Share premium 6,591 5,539 5,704
Other reserves 5 (5,706) (4,924) (5,474)
Total equity attributable to equity 1,226 882 551
holders of the parent
Liabilities
Non-current liabilities
Other payables - - 136
Total non-current liabilities - - 136
Current liabilities
Trade and other 1,367 1,129 1,098
payables
1,367 1,129 1,098
Total liabilities 1,367 1,129 1,234
Total equity and liabilities 2,593 2,011 1,785
Condensed unaudited consolidated interim statement of cash flows
For the six months ended 30 September 2012
Unaudited
6 months
Unaudited
to 30 Sept Audited Year
6 months to 30 to 31 March
Note 2012 Sept 2011 2012
£'000 £'000 £'000
Cash outflows from operating
activities 6 (1,007) (1,204) (1,115)
Investing activities
Acquisition of property, plant and
equipment (18) (1) (9)
Acquisition of intangible assets (120) - -
Net cash used in investing
activities (138) (1) (9)
Net cash flow before financing
activities (1,145) (1,205) (1,124)
Financing activities
Net proceeds from the issue of
share capital 907 980 1,199
Net cash generated from financing
activities 907 980 1,199
Net (decrease)/increase in cash
and cash equivalents (238) (225) 75
Cash and cash equivalents at start
of period 543 469 469
Net foreign exchange difference - - (1)
Cash and cash equivalents at end
of period 305 244 543
Condensed unaudited consolidated interim statement of changes in equity
For the six months ended 30 September 2012
Total
Share Share Share option Retained
capital premium reserve earnings
£'000 £'000 £'000 £'000 £'000
Balance at 1 April
2011 135 4,691 655 (5,253) 228
Loss for the
period - - - (384) (384)
Share option costs - - 58 - 58
Shares issued 132 848 - - 980
132 848 58 (384) 654
Balance at 30
September 2011 267 5,539 713 (5,637) 882
Loss for the
period - - - (601) (601)
Share option costs - - 51 - 51
Shares issued 54 165 - - 219
54 165 51 (601) (331)
Balance at 31
March 2012 321 5,704 764 (6,238) 551
Loss for the
period - - - (282) (282)
Share option costs - - 50 - 50
Shares issued 20 887 - - 907
20 887 50 (282) 675
Balance at 30
September 2012 341 6,591 814 (6,520) 1,226
Notes to the unaudited condensed consolidated interim financial statements
1. Background
Imaginatik plc (the "Company") is a company domiciled in the United Kingdom.
The unaudited condensed consolidated interim financial statements of the
Company for the six months ended 30 September 2012 comprise the Company and
its subsidiary (together referred to as the "Group").
The condensed consolidated interim financial statements were authorised for
issue on 21 November 2012.
The interim financial statements are not statutory accounts for the purposes
of section 435 of the Companies Act 2006. The comparative figures for the year
ended 31 March 2012 are not the Company's statutory accounts for that
financial year. The financial information for the year ended 31 March 2012 is
based on the statutory accounts for the financial year ended 31 March 2012
restated for the effects of the adoption of International Financial Reporting
Standards in issue and adopted for use in the European Union ("IFRSs"). Those
accounts have been reported on by the Company's auditors and delivered to the
Registrar of Companies. The report of the auditors was (i) unqualified, (ii)
did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report, and (iii) did
not contain a statement under section 498(2) or (3) of the Companies Act 2006.
2. Basis of preparation
The financial statements are presented in pounds sterling, rounded to the
nearest thousand, unless stated otherwise. They are prepared on the historical
cost basis.
These interim financial statements have been prepared using accounting
policies based on IFRS as adopted by the European Union (including IAS and
interpretations issued by the International Financial Reporting
Interpretations Committee ("IFRIC")) that are expected to be applicable for
the full reporting year in 2012. These remain subject to ongoing amendment
and/or interpretation and are therefore subject to possible change.
Consequently, information contained in these interim financial statements may
need updating for any subsequent amendments to IFRS, or for any new standards
that the Group may elect to adopt early.
The accounting policies have been applied consistently throughout the Group
for purposes of these condensed unaudited consolidated interim financial
statements.
3. Loss per share
Basic loss per share
The calculation of basic loss per share for the period ended 30 September 2012
was based on the loss attributable to ordinary shareholders of £282,000
(period ended 30 September 2011: £384,000; year ended 31 March 2012: £985,000)
and a weighted average number of ordinary shares outstanding during the period
ended 30 September 2012 of 684,252,511 (period ended 30 September
2011: 256,097,842; year ended 31 March 2012: 347,464,893).
Diluted loss per share
The options in place during the periods ended 30 September 2012 and 30
September 2011 and during the year ended 31 March 2012 are considered to have
an anti-dilutive effect. Therefore, basic and diluted loss per share is the
same for each of the three periods.
4. Segment reporting
Segment information is presented in the condensed consolidated interim
financial statements in respect of the Group's geographical segments, which
are the primary basis of segment reporting. The geographical segment reporting
format reflects the Group's management and internal reporting structure.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
Geographical segments
The Group's operations comprise the following main geographical segments,
determined on the basis of the location of customers:
Unaudited
6 months
to 30 Sept Audited Year to
Unaudited 6 months to 30 Sept
2012 2011 31 March 2012
£'000 £'000
Segment revenue
United States of
America 1,633 1,590 3,122
Rest of the world 121 34 325
1,754 1,624 3,447
Segment (loss)
United States of
America (253) (163) (896)
Rest of the world (29) (221) (89)
(282) (384) (985)
Unaudited Unaudited
30 Sept 30 Sept Audited
2012 2011 31 March 2012
Segment total assets £'000 £'000 £'000
United States of
America 2,054 1,517 1,333
Rest of the world 538 494 452
2,592 2,011 1,785
5. Share Capital and Reserves
Unaudited
6 months Audited Year to
to 30 Sept Unaudited 6 months 31 March
2012 to 30 Sept 2011 2012
£'000 £'000 £'000
Share Capital
At the beginning of the period 321 135 135
Shares issued 20 132 186
At the end of the period 341 267 321
Share premium
At the beginning of the period 5,704 4,691 4,691
Shares issued in the period, net
of expenses 887 848 1,013
At the end of the period 6,591 5,539 5,704
Other reserves
At the beginning of the period (5,474) (4,598) (4,598)
Loss for the period (282) (384) (985)
Share-based payments 50 58 109
At the end of the period (5,706) (4,924) (5,474)
6. Cash flows from operating activities
Unaudited
6 months
to 30 Sept Unaudited 6 months Audited Year to
2012 to 30 Sept 2011 31 March 2012
£'000 £'000 £'000
Operating loss (282) (384) (1,085)
Depreciation of tangible fixed
assets 23 31 59
Amortisation of intangible
fixed assets 10 31 53
Share-based payment expense 50 58 109
Operating cash flows before
movements in working capital (199) (264) (864)
(Increase) in trade and other
receivables (941) (641) (157)
(Decrease) / increase in
payables 133 (299) (194)
Net movement in working capital (808) (940) (351)
Cash used by operations (1,007) (1,204) (1,215)
Corporation tax received - - 108
Net interest expense - - (8)
Net cash from operating
activities (1,007) (1,204) (1,115)
7. Availability of announcement
Copies of this announcement will be available from the Company's offices at
Carnac Cottage, Cams Hall Estate, Fareham, Hampshire, PO16 8UU and from its
website, www.imaginatik.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BKKDNOBDDADB -0- Nov/21/2012 07:00 GMT
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