(Alliance News) - Minds + Machines Group Ltd on Wednesday confirmed that it is profitable and cash generative, with the majority of revenue recurring, as its interim chief executive officer and chief financial officers get to grips with the company.
Shares in the internet domain name firm were 32% higher in London on Wednesday at 5.00 pence each.
"Since our update on October 30, Tony Farrow has assumed the role of interim CEO. In his first week he has worked with Bryan Disher, interim CFO to review the company's billings, cash flows and overall financial position as well as the day to day operations of the group," Minds + Machines explained.
As part of this review, the CEO and CFO have confirmed the company is profitable and cash generative.
Farrow, the company's former chief operating officer, and Disher, previously a non-executive director, were appointed to the interim roles late last month, after Minds + Machines concluded an investigation to determine whether some revenue was incorrectly recognised in relation to a contract entered into in 2019.
As a result of the probe, 2019 revenue was revised lower and CEO Toby Hall and CFO Michael Salazar left by mutual agreement with immediate effect.
Minds + Machines added: "We continue to see strong renewal billings. Operating cash flow for 2020 is expected to exceed USD4.0 million, which would result in available cash at December 31, 2020 of more than USD8.0 million."
The company said it is committed to steps that are expected to reduce operating expenses and cost of goods sold in 2021 when compared to their expected amounts in 2020.
In addition, as a result of recent management changes, 46 million options and restricted stock units were forfeited, thereby reducing the company's fully diluted shares by approximately 4.7%.
Minds + Machines said it remains committed to returning excess capital to shareholders.
"In light of the cash generative nature of the business, the available cash and confidence in respect of future cash flows, the board announces that it has approved a share buyback programme of ordinary shares of no par value in the capital of the company up to a maximum of GBP2.3 million," Minds + Machines added.
It continued: "The buyback programme forms part of the group's broader strategy to deliver shareholder value and the company will buy ordinary shares in the market as well as any larger lines of ordinary shares, should they become available."
The buyback programme will be managed by finnCap Ltd, the company's broker. The programme will start on Wednesday and will continue, subject to not being completed earlier, until December 31.
By Paul McGowan; paulmcgowan@alliancenews.com
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