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Half-year Report

27 Sep 2018 07:00

RNS Number : 0903C
Maistro PLC
27 September 2018
 

 

Maistro plc

("Maistro", the "Group" or the "Company")

 

Unaudited Interim Results

 

Maistro, the online B2B Marketplace and AI-powered delivery platform, presents its unaudited interim results for the six months ended 30 June 2018.

 

Highlights

 

The Board is pleased to report significant improvement in both Revenue and Gross Profit performance, with Revenue increasing by 255% when compared to H1 2017, and by 41% when compared to H2 2017. As a result of the Company's continued drive to recognise efficiencies from investment in its software platform, the Gross Profit contribution has increased by 1,127% when compared to H1 2017. The EBITDA* loss has reduced by 5.7% when compared to H1 2017.

 

Revenue is being driven by the increasing take up of services by Multinational Enterprises with the financial performance continuing to improve with our Enterprise** customers driving operational efficiencies whilst maintaining stringent cost control.

 

The Board concluded in 2018 that the reporting currency of the Company has been changed to GBP Sterling from US Dollars to provide greater transparency in the operating results of the Company.

 

In relation to strategic and operational highlights, the successful re-branding of the business was completed in January 2018. The Company appointed Ian Cleverly to the Board as Chief Financial Officer on 9 April, and appointed Pricewaterhouse Coopers as its auditors.

 

The Board is encouraged by the Company's performance over the six months ended 30 June 2018, and as a result, is accelerating investment in its software platform and expanding its business development team to enable the Enterprise Customer strategy to deliver an increased volume in the number of projects, whilst retaining margins and delivering value to its customers. The Board is confident with the Company's outlook for the rest of the year and beyond.

 

 

Summary Financial Results

 

 

H1 2018

H1 2017

FY 2017

 

 
 

 

Unaudited

Unaudited

Unaudited

H1 2018 on H1 2017 change

 

 

£'000s

£'000s

£000s

 

Revenue

596

168

592

254.5%

 

Gross profit

74

6

100

1,127.4%

 

Adjusted EBITDA*

(923)

(979)

(2,082)

(5.7)%

 

Loss for the period

(1,354)

(1,458)

(2,250)

(7.1)%

 

Cash balance at period end

1,085

755

2,454

(55.8)%

 

* Adjusted EBITDA is profit before interest, tax, depreciation and amortisation, foreign exchange movements and share option costs. EBITDA is a key monitoring tool used by the Board to monitor underlying trading performance while excluding the impact of non-trading items which may, due to one off adjustments, materially impact reported performance.

** Maistro defines the Enterprise as a business with more than 50 employees

 

 

 

 

 

Chairman David Rowe commented:

 

I am pleased to report that the Company has made excellent progress during the last six months.

 

Firstly, the Company under Laurence Cook's leadership has successfully built a core customer base in the Enterprise segment for its PaaS (Procurement as a Service) product. Revenue has grown rapidly as a result and the momentum going forward gives the Board confidence for the remainder of the year and beyond.

 

Secondly, the rebranding to Maistro at the turn of the year has been universally well received and the company is gaining acceptance and recognition as a leader in its field. Building on this recognition we expect the business to attract projects from existing and new customers to ramp up the value of business going through the platform.

 

The Company is well positioned and poised to grow rapidly whilst maintaining margins and delivering strong value to its customers.

 

 

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

For further information, please contact:

 

Maistro plc investors@Maistro.com

 

N+1 Singer

Shaun Dobson/James White Tel: +44 (0) 20 7496 3000

 

About Maistro plc at Maistro.com

Maistro is a public company quoted on the London Stock Exchange's AIM market (MAIS) and is headquartered in the UK.

 

Chief Executive Officer's review

 

Since June 2017 we have posted 4 consecutive quarters of revenue growth and that trajectory continues at an increasing pace. This success is based on more repeat business from our core Multinational Enterprise customer base together with new customers joining the platform. It's pleasing to see that H1 2018 results have exceeded full FY 2017 and is further evidence that our strategy of focussing on large Enterprises where there is significant opportunity for a high volume of business is paying off. As we provide services for these customers we have extended our reach into Europe and the Far East where we have successfully delivered large projects in a variety of categories. In doing so we continue to increase the number and quality of suppliers on our marketplace giving all our customers greater choice of new and innovative service providers.

 

Whilst growing top line revenue we have been laser focussed on ensuring that the Gross Margin maintains its upward path and at the same time managing cash effectively. The strategy of investing in our software platform continues as we develop the AI capability which will incrementally speed up the sourcing of suppliers and as a result provide an even faster and more cost-effective solution for our growing customer base.

 

Over the last 6 months we have extended our collaborations in the procurement industry through a partnership agreement with Odesma advising large enterprises on cost-optimisation strategies and through an exclusive knowledge partnership agreement with CIPS* focussing on B2B Marketplaces. We are increasingly being recognised by the procurement industry as an exciting player in the Procurement as a Service sector.

 

I am very encouraged by our performance to date and look forward to the second half of the year being even more successful than the first as we take on more new customers and grow our repeat business within existing Enterprises. The outlook for H2 is encouraging and with an increasing run-rate the pace of growth into 2019 is set to be very positive.

 

 

*CIPS - Chartered Institute of Procurement and Supply

 

 

 

 

Chief Financial Officer's review

 

In the first half of 2018, Maistro continued to focus on its Enterprise strategy, developing and expanding its relationships with its customer base. The strategic outlook is very encouraging, as we report significant improvements in both Revenue and Gross Margin performance with a continued focus on the operational costs and improving operational efficiencies to drive performance towards a positive EBIDTA.

 

The Board concluded in H1 2018 to change the currency it presents its financial results from US Dollars to GBP Sterling. Accordingly, the previously reported results for the six months ended 30 June 2017 and for the year ended 31 December 2017 have been translated from US Dollars to GBP Sterling using the exchange rates set out in Note 1.

 

Revenue

Overall revenue performance for the six months to 30 June 2018 increased by 255% to £0.60m (H1 2017: £0.17m) within which Project fee revenue increased by 393% to £0.58m (H1 2017: £0.12m). Revenue growth was due to two key factors:

 

a. The ongoing development of Maistro's relationships with global Enterprise customers.

b. Successful engagement with new global Enterprise customers.

 

Gross margin

Gross profit was £0.07m in H1 2018 (H1 2017: £0.01m. This increase has been driven by the reduction to operations staff costs charged to cost of sales, which reduced by 28% to £0.05m (H1 2017: £0.07m). Further automation of Maistro's software platform and delivery processes has driven improved operational efficiency.

 

Costs

Total administrative expenses decreased by 2% to £1.49m (H1 2017: £1.52m) reflecting actions taken to realign costs last year. Headcount costs remained stable, decreasing by 1% compared to H1 2017. Share based payments reduced by 7% compared to H1 2017.

 

The credit risk associated with the customers using the marketplace resulted in a £(0.01m) (H1 2017: £(0.08m) bad debt provision included in administrative costs. The credit balance was, in part, driven by recovery of previously provided for bad debts. The bad debt provision at 30 June 2018 was £nil (H1 2017: £0.03m reflecting a material improvement in the level of service provided to customers.

 

EBITDA

The EBITDA loss (Earnings before Interest, Tax, Depreciation and Amortisation, Foreign Exchange movements and Share Option costs) for H1 2018 reduced by 5.7% to £0.92m (H1 2017: £0.98m). This was driven by the increase in Gross Margin and reduction in administrative costs in the period.

 

Loss after tax

The loss after tax for the period reduced by 7.1% to £1.35m (H1 2017: £1.46m).

 

Finance income improved to £0.007m (H1 2017: £0.001m) reflecting increased cash balances held on deposit.

 

Cash

The cash balance at the period end was £1.1m (31 December 2017: £2.5m). The Group predominantly holds its cash in Sterling. At 30 June 2018, the Group's Sterling deposits totaled £1.06m with a further £0.03m held in USD and EUR denominated accounts.

 

The net decrease in cash and cash equivalents was 7% higher in H1 2018 compared to H1 2017, driven by the longer cash cycle associated with Enterprise customers.

 

The Company's cash balance as at 31st August 2018 was £1.004m. As disclosed in the 2017 Annual Report the Company is developing its business model and continues to be loss making. The Company is well positioned and poised to grow rapidly and as such the Board recognises that the Company may require additional funding in the future and would be reliant on either Warrants being exercised or other additional funding from time to time.

 

 

 

 

Chief Financial Officer's review cont'd

 

 

Capital Investment

Maistro invested £0.26m (H1 2017: £0.29m) in its software platform during the period. Investment is principally focused on the development and implementation of "AI" (Artificial Intelligence) within the software platform to enhance functionality and improve operational efficiency.

 

Risks and uncertainties

The key business risks affecting the Group remain as stated in the Annual Report for the Year ended 31 December 2017.

 

 

 

Condensed Consolidated Statement of Total Comprehensive Income

for the period ended 30 June 2018

 

 

Six Months Ended

Six Months Ended

 

 

30 June 2018

30 June 2017

 

 

Unaudited

Unaudited

 

Note

£

£

 

 

 

 

Revenue

2

595,681

168,052

Cost of sales

 

(521,268)

(161,989)

 

 

 

 

Gross profit

 

74,413

6,063

 

 

 

 

 

Total administrative expenses

 

3

 

(1,489,166)

 

(1,523,022)

 

 

 

 

Loss from operations

 

(1,414,753)

(1,516,960)

 

 

 

Finance income

 

6,885

1,318

Finance expense

 

(28)

(16)

 

 

 

 

Loss before tax

 

(1,407,896)

(1,515,657)

 

 

 

 

Tax credit

 

54,347

58,150

 

 

 

 

Loss for the year attributable to equity holders of the parent Company

 

(1,353,549)

(1,457,507)

 

 

 

 

Condensed Consolidated Statement of Total Other Comprehensive Income for the Period Ended 30 June 2018

 

 

Six Months Ended

 30 June 2018

Unaudited

£

Six Months Ended

 30 June 2017

Unaudited

£

 

(Loss) for the year

 

(1,353,549)

(1,457,507)

 

Other comprehensive income

 

 

 

Exchange gains/(losses) arising on the translation of foreign subsidiaries (could subsequently be reclassified to profit and loss)

 

34

(501)

Total comprehensive losses attributable to equity holders of the parent Company

 

(1,353,515)

(1,458,008)

 

Basic and diluted loss per share for losses attributable to the owners of the parent during the year

5

(0.01)

(0.03)

 

The results reflected above relate to continuing activities.

 

The accompanying notes are an integral part of these financial statements.

 

Condensed Consolidated Statement of Financial Position

At 30 June 2018

 

 

 

 

 

 

 

Six Months Ended

30 June 2018

Year Ended

31 December 2017

 

 

 

Unaudited

Unaudited

 

 

Note

£

£

 

 

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

25,027

25,269

 

Intangible assets

6

1,230,542

1,368,423

 

Total non-current assets

 

1,255,569

1,393,692

 

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

7

434,422

387,339

 

Tax Receivable

 

203,050

151,775

 

Cash and cash equivalents

 

1,085,204

2,454,191

 

Total current assets

 

1,722,676

2,993,305

 

 

 

 

 

 

Total assets

 

2,978,245

4,386,997

 

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables (including derivatives)

 

691,076

856,100

 

Social security and other taxes

 

84,811

57,737

 

Loans and borrowings

8

-

10,000

 

Total current liabilities

 

775,887

923,837

 

 

 

 

 

 

Total liabilities

 

775,887

923,837

 

 

 

 

 

 

Net assets

 

2,202,358

3,463,160

 

 

 

 

 

 

Issued capital and reserves attributable to owners of parents

 

 

 

Called up share capital

9

1,770,926

1,770,926

 

Share premium

9

24,334,182

24,334,182

 

Equity conversion reserve

 

11,118

5,559

 

Merger reserve

 

1,061,789

1,061,789

 

Share based payment reserve

10

307,471

220,317

 

Warrant Reserve

 

307

307

 

Foreign exchange reserve

 

(9,618)

(9,652)

 

Retained losses

 

(25,273,817)

(23,920,268)

 

 

 

2,202,358

3,463,160

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

Condensed Consolidated Statement of Changes in Equity

for the Period Ended 30 June 2018

 

 

 

 

 

Called Up Share Capital

Share Premium

Equity Conversion Reserve

Merger Reserve

Share Based Payment Reserve

Warrant Reserve

Foreign Exchange Reserve

Retained Loss

Total

 

£

£

£

£

£

£

£

£

£

Equity as at 1 January 2017

470,926

22,878,031

5,559

1,061,789

786,730

-

(9,194)

(21,669,794)

3,524,047

Loss for the period

-

-

-

-

-

-

-

(1,457,507)

(1,457,507)

Other comprehensive income for the period

-

-

-

-

-

-

(501)

-

(501)

Total comprehensive income/(loss)

470,926

22,878,031

5,559

1,061,789

786,730

-

(9,695)

(23,127,301)

2,066,039

Issue of Ordinary shares

-

-

-

-

-

-

-

-

-

Issue costs recognised in equity

-

-

-

-

-

-

-

-

-

Share Based Payments

-

-

-

-

89,168

-

-

-

89,168

Conversion of convertible debt

-

-

-

-

-

-

-

-

-

Equity as at 30 June 2017 (Unaudited)

470,926

22,878,031

5,559

1,061,789

875,898

 

-

(9,695)

(23,127,301)

2,155,207

 

 

 

 

 

 

 

 

 

 

Equity as at 1 January 2018

1,770,926

24,334,182

5,559

1,061,789

220,317

307

(9,652)

(23,920,268)

3,463,160

Loss for the period

-

-

-

-

-

-

-

(1,353,549)

(1,353,549)

Other comprehensive income for the period

-

-

-

-

-

-

34

-

34

Total comprehensive income/(loss)

1,770,926

24,334,182

5,559

1,061,789

220,317

307

(9,618)

(25,273,817)

2,109,645

Issue of Ordinary shares

-

-

-

-

-

-

-

-

-

Issue costs recognised in equity

-

-

-

-

-

-

-

-

-

Share Based Payments

-

-

-

-

87,154

-

-

-

87,154

Conversion of convertible debt

-

-

5,559

-

-

-

-

-

5,559

Equity as at 30 June 2018 (Unaudited)

1,770,926

24,334,182

11,118

1,061,789

307,471

 

307

(9,618)

(25,273,817)

2,202,358

 

 

 

Condensed Consolidated Statement of Cashflows

for the Period Ended 30 June 2018

 

 

 

 

Six Months Ended

Six Months Ended

 

 

30 June 2018

30 June 2017

 

 

Unaudited

Unaudited

 

Note

£

£

Loss after taxation

 

(1,353,549)

(1,457,507)

Interest (income)/expense (net)

 

(6,857)

(1,303)

Income tax credit

 

(54,347)

(58,150)

Fair value movement and unrealised FX

 

9,909

(670)

Depreciation of property, plant and equipment

 

8,892

4,622

Amortisation of intangible assets

6

394,925

449,427

Share-based payments charge

10

82,740

89,168

Loss on disposal of property, plant and equipment

 

-

-

Cash outflows from operating activities before

changes in working capital

 

(918,287)

(974,413)

(Increase)/decrease in trade and other receivables

 

(47,086)

(53,955)

Increase/(decrease) in trade and other payables

 

(147,950)

43,051

Cash used in operations

 

(1,113,323)

(985,317)

 

 

 

 

Interest received

 

6,885

1,318

Interest paid

 

(28)

(16)

Income tax (paid)/received

 

3,073

(2,163)

Net cash used in operations

 

(1,103,393)

(986,178)

 

 

 

 

 

Purchase of property, plant and equipment

 

(8,650)

-

Proceeds on disposal of property, plant and equipment

 

-

-

Investment in intangible assets

 

(257,044)

(289,706)

Net cash used in investing activities

 

(265,694)

(289,706)

 

 

 

 

Issue of share capital

 

-

-

Issue cost of shares

 

-

-

Share based payments

 

-

-

Proceeds from convertible debts

 

-

-

Net cash generated in financing activities

 

-

-

 

Net decrease in cash and cash equivalents

 

(1,369,087)

(1,275,884)

Cash and cash equivalents at beginning of period

 

2,454,191

2,030,867

Effect of foreign exchange translation on cash and equivalents

 

100

170

Cash and cash equivalents at end of period

 

1,085,204

755,153

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

Note to the Condensed Consolidated Financial Information

 

1. Accounting policies

 

Basis of preparation

 

The principal accounting policies adopted in the preparation of these condensed Financial Statements are set out in the full accounts for 2017. The policies have been consistently applied to all the periods presented, except for the change in presentational currency from US Dollars to GBP Sterling.

 

These condensed Financial Statements have been prepared in accordance with IAS34 "Interim Financial Statements", as adopted by the European Union.

 

These condensed interim Financial Statements do not constitute statutory Financial Statements within the meaning of Section 434 of the Companies Act 2006. The financial information presented for the six-month periods ended 30 June 2018 and 30 June 2017 has not been audited. The comparative information presented for the year ended 31 December 2017 does not constitute the full statutory Annual Report of Maistro Plc for that year and is not audited due to the change in presentational currency (the audited statutory annual report of Maistro plc for the year ended 31 December 2017 was presented in US Dollars). A copy of the 31 December 2017 statutory Financial Statements has been delivered to the Registrar of Companies. The auditor's report on those statements was unqualified but included reference to an emphasis of matter in relation to Going Concern. That opinion did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

 

The preparation of Financial Statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The accounting policies have been applied consistently throughout the Group for the purposes of the preparation of the Interim Financial Statements, except for the change in presentational currency.

 

The Group Financial Statements consolidate the Financial Statements of the Company and its subsidiaries (together referred to as "the Group").

 

Basis of consolidation

 

Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated Financial Statements present the results of the Company and its subsidiaries (the Group) as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

 

Foreign currency

 

The functional currency of Maistro Group plc and Maistro Ltd is GBP Sterling, whereas of Maistro Inc. it is US Dollars.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement in either cost of sales or administrative expenses as appropriate.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities are recognised in other comprehensive income and accumulated in a separate component of equity. Exchange differences are recycled to profit or loss as a reclassification adjustment upon disposal of the foreign operation.

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

Change in presentation currency

 

As part of a review, the Board concluded that from the beginning of the current financial year it would be changing the currency in which it presents its financial results from US Dollars to GBP Sterling. Accordingly, the previously reported results for the six months ended 30 June 2017 and for the year ended 31 December 2017 have been translated from US Dollars to GBP Sterling using the following exchange rates:

 

 

Exchange rates used USD:GBP

Year ended 31 December 2017

Six months ended 30 June 2017

Year ended 31 December 2016

Average rate

1.3284

1.2949

1.2399

Year-end rate

1.3493

1.3003

1.2341

 

 

 

2. Segmental analysis

The Group currently has one reportable segment, provision of services, and categorises all revenue from operations to this segment.

 

The Group currently has four reportable categories which are:

 

1. Project revenues - for the provision of services from projects that list on Maistro's marketplace, where the customer accepts the bid from the expert supplier and a legally binding contract between Maistro and its customers is established;

 

2. Cancellation fees (formerly listing fees) - where the project is cancelled after listing and there is an expectation of collection. The Cancellation fee is a mandatory charge when a customer listed a project and decided to close their trading account or not to select an expert;

 

3. Premium services - comprising wrap around support services for projects;

 

4. Subscriptions and licenses - for the provision of tiered annual subscriptions to service providers to gain access to high value project opportunities and market insights; the provision of access to Maistro's Software Platform and for the provision of subscriptions of Maistro Data, which analyses the business services landscape including category trends, pricing and timeline forecasts.

 

 

Project Revenue - Unaudited

Cancellation Fees (formerly Listing Fees) - Unaudited

Premium Services - Unaudited

Subscriptions - Unaudited

 

Six Months Ended

Six Months Ended

Year Ended

Six Months Ended

Six Months Ended

Year Ended

Six Months Ended

Six months ended

Year Ended

Six months Ended

Six months Ended

Year Ended

 

30 June 2018

30 June 2017

31 Dec 2017

30 June 2018

30 June 2017

31 Dec 2017

30 June 2018

30 June 2017

31 Dec 2017

30 June 2018

30 June 2017

31 Dec 2017

 

£

£

£

£

£

£

£

£

£

£

£

£

UK

322,805

78,343

305,142

-

-

-

2,000

16,670

83,892

6,576

26,212

40,228

USA

4,712

13,700

22,373

-

-

-

-

79

77

327

3,209

3,994

Rest of World

256,749

26,387

128,699

-

-

-

-

-

-

2,512

3,452

7,613

Total

584,266

118,430

456,214

-

-

-

2,000

16,749

83,969

9,415

32,873

51,835

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

2. Segmental analysis (continued)

 

The Group operates in three main geographic areas: UK, USA and Rest of the World. Revenue by origin of geographical segment for all entities in the Group is as follows:

 

Six Months Ended

Six Months Ended

Year Ended

 

30 June 2018

30 June 2017

31 December 2017

 

Unaudited

Unaudited

Unaudited

 

£

£

£

UK

331,381

121,225

429,262

USA

5,039

16,988

26,444

Rest of World

259,261

29,839

136,312

Total

595,681

168,052

592,018

 

 

 

3. Loss from operations

 

The operating loss as at 30 June 2018 is stated after charging:

 

Six Months Ended

Six Months Ended

Year Ended

 

30 June 2018

30 June 2017

31 December 2017

 

Unaudited

Unaudited

Unaudited

 

£

£

£

Amortisation of intangibles

394,925

449,427

876,886

Bad debt provision

(14,836)

(84,135)

(5,993)

Depreciation of property, plant and equipment

8,892

4,622

9,563

(Profit)/Loss on disposal of property, plant and equipment

-

-

924

Staff costs

631,167

640,443

485,156

Operating lease expense - buildings

(6,970)

39,972

79,411

Foreign exchange (gains)/ losses

5,367

(5,084)

(2,459)

Other administrative expenses

470,621

477,777

1,056,990

Total administrative and other expenses

1,489,166

1,523,022

2,500,478

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

4. EBITDA

 

EBITDA is calculated as follows:

 

Six months ended

Six months ended

Year ended

30 June 2018

30 June 2017

31 Dec 2017

 

Unaudited

Unaudited

Unaudited

 

£

£

£

Earnings from operations

(1,414,753)

(1,516,960)

(2,400,215)

Amortisation of intangibles

394,925

449,427

876,886

Depreciation of property, plant and equipment

8,892

4,622

9,563

(Profit)/Loss on disposal of property, plant and equipment

-

-

924

Foreign exchange gains/(losses)

5,367

(5,083)

(2,459)

Share based payments

82,740

89,168

(566,413)

EBITDA

(922,829)

(978,826)

(2,081,714)

 

 

 

 

5. Loss per share

Loss per ordinary share has been calculated using the weighted average number of shares in issue during the relevant financial periods. The basis for calculating the basic loss per share is as follows:

 

Six Months Ended

 

Six months Ended

Year Ended

 

30 June 2018

30 June 2017

31 December 2017

 

Unaudited

Unaudited

Unaudited

 

£

£

£

Weighted average number of shares for the purpose of earnings per share

177,092,851

47,092,851

95,750,385

Loss after tax

(1,353,549)

(1,457,507)

(2,250,474)

Loss per share

(0.01)

(0.03)

(0.02)

 

Due to the loss in the period the effect of the share options was considered anti-dilutive and hence no diluted loss per share information has been provided.

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

6. Intangible assets

 

 

 

 

 

Trading

Platform

Software Development

Total

 

£

£

£

COST

 

 

 

At 1 January 2017

3,434,473

206,443

3,640,916

Additions - Internal Development

527,224

-

527,224

Additions - External Costs

-

2,924

2,924

Disposals

-

-

-

At 31 December 2017 - Unaudited

3,961,697

209,367

4,171,064

Additions - Internal Development

256,596

-

256,596

Additions - External Costs

-

448

448

Disposals

-

-

-

At 30 June 2018 - Unaudited

4,218,293

209,815

4,428,108

 

 

 

 

AMORTISATION

 

 

 

At 1 January 2017

1,767,027

158,728

1,925,755

Charge for period

831,916

44,970

876,886

Disposals

-

-

-

At 31 December 2017 - Unaudited

2,598,943

203,698

2,802,641

Charge for period

391,490

3,435

394,925

At 30 June 2018 - Unaudited

2,990,433

207,133

3,197,566

 

 

 

 

NET BOOK VALUE

 

 

 

At 30 June 2018

1,227,860

2,682

1,230,542

At 31 December 2017

1,362,754

5,669

1,368,423

 

 

 

 

 

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

7. Trade and other receivables

 

Six Months Ended

Year Ended

 

30 June 2018

31 December 2017

 

Unaudited

Unaudited

 

£

£

Trade receivables - gross

189,135

210,347

Provision for impairment

-

(27,528)

Trade receivables - net

189,135

182,819

Prepayments

120,122

103,896

Accrued Income

117,544

47,739

Other receivables

7,621

52,884

 

434,422

387,338

 

All amounts shown under receivables are due within one year.

 

 

8. Loans and borrowings

 

Six Months Ended

Year Ended

 

30 June 2018

31 December 2017

 

Unaudited

Unaudited

Unsecured convertible loan note

£

£

Current

-

10,000

Total loans and borrowings

-

10,000

 

Book value approximate to fair value for the convertible debt and is stated at fair value at initial recognition and at amortised cost subsequently.

 

The convertible loan notes (referred to as convertible debt II) were issued in 2011 with a coupon rate of 15% at a total face value of US$78,010. The loan notes are either repayable in four years from the issue date at its total face value, with interest accrued and payable as ordinary shares issued in the Company or can be converted at any time within two years into shares at the holder's option. The value of the liability component and the equity conversion component were determined at the date the instrument was issued.

 

During the period to 31 December 2012 loan note holders converted their loan notes into Ordinary shares of the company. Only one convertible loan note remained outstanding relating to Peter Tahany. There was an ongoing claim relating to the provision of Mr. Tahany's consultancy services from September 2009 to early 2010. During the period, the Board considered the risk of incurring costs relating to this claim remote, and as such wrote off the liability.

 

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

8. Loans and borrowings (continued)

 

There are no cash flow movements arising from loans and borrowings.

 

Face value

 

 

Equity conversion reserve

 

Fair value

of liability

 

 

 

£

£

£

As at 1 January 2018

10,000

5,559

15,559

Accretion in loan note liability value

-

-

-

Amounts written off during the period

(10,000)

5,559

(4,441)

As at 30 June 2018

-

11,118

11,118

 

9. Share capital

 

Share capital allotted and fully paid up

 

Ordinary shares of £0.01 carry the right to one vote per share at general meetings of the Company and the rights to share in any distribution of profits or returns of capital and to share in any residual assets available for distribution in the event of a winding up. The shares are denominated in Pounds Sterling and translated at the historic rate.

 

The table below shows the movements in share capital for the year:

 

Number of shares

Share Capital £

Share premium £

 

Six Months Ended

 

Year Ended

Six Months Ended

 

Year Ended

Six Months Ended

 

Year Ended

 

30 June 2018

31 December 2017

30 June 2018

31 December 2017

30 June 2018

31 December 2017

Movement in ordinary share capital

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Balance at the beginning of the period

177,092,851

47,092,851

1,770,926

470,926

24,334,182

22,878,031

Issue of new shares

-

130,000,000

-

1,300,000

-

1,649,693

Share issue costs

-

-

-

-

-

(193,542)

Balance at the end of the period

177,092,851

177,092,851

1,770,926

1,770,926

24,334,182

24,334,182

 

The Group does not hold any treasury shares.

 

 

 

 

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

9. Share capital (continued)

 

The Group has, in 2017, issued securities with warrant rights attached, as follows:

 

 

 

Warrant Rights 1

Warrant Rights 2

Date of Issuance

1st August 2017

11th October 2017

Number of Ordinary shares issued

100,000,000

30,000,000

Warrant rights attached to Ordinary shares

1 warrant per 4 Ordinary shares issued

1 warrant per 2 Ordinary shares issued

Number of warrant rights

25,000,000

15,000,000

Warrant subscription price

£0.035

£0.06

Initial exercise date

1st August 2018

11th October 2018

Final exercise date

1st August 2019

11th October 2019

Form of purchase

Cash purchase

Cash purchase

 

 

 

10. Share-based payments

 

The company operates two option schemes, namely an unapproved option scheme and an Enterprise Management Incentive ('EMI') scheme.

 

In compliance with the requirements of IFRS 2 on share-based payments, the fair value of options granted during the period or which were granted in previous periods but had an extended period before vesting is calculated either using the Black Scholes option pricing model or on the basis of the fair value of remuneration waived in consideration for the grant.

 

Further, as disclosed in the 2017 Annual Report, options over Ordinary shares were expected to be granted by the Board to David Rowe as part of his incentive-based remuneration package. On 20 March 2018, these options were granted under the following terms:

 

- Condition A - If the Company's share price averages 10 pence or more for 3 consecutive months from the grant date until 31 December 2019 (inclusive), David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time.

 

- Condition B - If the Company's share price averages 15 pence or more for 3 consecutive months from the grant date until 31 December 2020 (inclusive), David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time.

 

- Condition C - If the Company in any financial year from the grant date until 31 December 2021 (inclusive) becomes EBITDA positive, David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time. For the purposes of Condition C, reference to the EBITDA shall be to the earnings before all interest, tax, depreciation, and amortisation for the relevant financial year as stated in the audited financial statements.

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

10. Share-based payments (continued)

 

In compliance with the requirements of IFRS 2 on share-based payments, the fair values of the options issued to David Rowe were estimated at the grant date using the share price at the grant date less the exercise price, multiplied by the probabilities of vesting, which reflect the market vesting conditions. The market vesting probabilities were determined using an adjusted form of the Black-Scholes model, which includes a Monte Carlo simulation process that takes into account the terms and conditions on which the options were granted (the exercise price, the term of the option, the share price at the grant date, the vesting conditions, the expected volatility of the underlying share, the expected dividend yield, and the short-term risk-free rate over the term of the option).

 

 

 

Six Months Ended

Six Months Ended

Year Ended

 

 30 June 2018

30 June 2017

31 December 2017

 

Unaudited

Unaudited

Unaudited

 

£ 

£

£

In the Statement of Comprehensive Income, the Company recognised the following charge in respect of its share-based payment plans:

82,740

89,168

(566,413)

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

11. Related party transactions

 

The following payments were made to related parties during the period:

 

 

Six Months Ended

Six Months Ended

 

30 June 2018

30 June 2017

 

Unaudited

Unaudited

 

£

£

 

 

 

 

Consultancy fees1

 

-

21,323

 

-

21,323

 

Out of above balances outstanding at period end in trade payables and accruals are £nil (30 June 2017: £nil).

 

1 Consultancy fees of £nil (Six months ended 30 June 2017: £21,323) were paid to Revviva LLC, a company in which K Cardinale has an interest. These were paid for K Cardinale's director services.

 

 

Revenue or other related receipts from key management personnel (including Directors):

 

 

Six Months Ended

Six Months Ended

30 June 2018

30 June 2017

 

Unaudited

Unaudited

 

£

£

 

 

 

 

 

Project revenue1,2

 

-

2,483

 

-

2,483

 

1 Project revenue includes £nil (Six months to 30 June 2017: £515) revenue recognised for projects carried out on behalf of Letts Estates Limited, a company in which Philip Letts has an interest. The projects were carried out on an arms-length basis. There are no amounts outstanding to or from the company at the period end.

 

2 Project revenue includes £nil (Six months to 30 June 2017: £1,968) revenue recognised for projects carried out on behalf of Tanfield Limited, a company in which Richard Bourne-Arton has an interest. The projects were carried out on an arms-length basis. There are no amounts outstanding to or from the company at the period end.

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

11. Related party transactions (continued)

 

The following loans are due (to)/from Directors:

 

Six Months Ended

Year Ended

 

30 June 2018

31 December 2017

 

Unaudited

Unaudited

P Letts:

£

£

Opening balance

-

(12,739)

Amounts advanced from the Group

-

12,774

Expenses incurred on behalf of the Group

-

(3,008)

Exchange adjustments

-

2,973

Closing balance

-

-

 

 

 

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

11. Related party transactions (continued)

 

The Directors hold the following warrants, in the capacity of a shareholder, rather than in the capacity of a director providing services.

 

 

2018

2017

2017

2017

 

No. Warrants

Warrant Issue 1*

Warrant Issue 2*

Total Warrants

Laurence Cook 1

-

-

-

-

Ian Cleverly9

-

-

-

-

David Rowe 2,3

-

2,142,857

1,250,000

3,392,857

Preeti Mardia 2,3

-

214,286

250,000

464,286

Richard Rae 2,3

-

1,071,429

500,000

1,571,429

Richard Croft 2,3,4

-

357,143

250,000

607,143

Philip Letts 5

-

-

-

-

Kara Cardinale 6

-

69,159

-

69,159

Timothy Allen 7

-

-

-

-

Richard Bourne-Arton 3, 8

-

-

-

-

David John Sherriff 3,6

-

103,739

-

103,739

Roger de Peyrecave 3,6

-

34,580

-

34,580

Robert Wirszycz 3,6

-

-

-

-

Total

-

3,993,193

2,250,000

6,243,193

 

* See Note 9 for specific warrant terms

1 Appointed 7 August 2017

2 Appointed 10 July 2017

3 Non-Executive Director

4 Company Secretary

5 Resigned 1 August 2017

6 Resigned 10 July 2017

7 Resigned 28 July 2017

8 Resigned 31 January 2017

9 Appointed 9 April 2018

 

 

 

 

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

11. Related party transactions (continued)

 

The following share options were granted to David Rowe on 20th March 2018 as part of his incentive-based remuneration package:

 

- Condition A - If the Company's share price averages 10 pence or more for 3 consecutive months from the grant date until 31 December 2019 (inclusive), David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time.

 

- Condition B - If the Company's share price averages 15 pence or more for 3 consecutive months from the grant date until 31 December 2020 (inclusive), David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time.

 

- Condition C - If the Company in any financial year from the grant date until 31 December 2021 (inclusive) becomes EBITDA positive, David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time. For the purposes of Condition C, reference to the EBITDA shall be to the earnings before all interest, tax, depreciation, and amortisation for the relevant financial year as stated in the audited Financial Statements.

 

In the Statement of Comprehensive Income, the Company recognised the following charge in respect of share options relating to David Rowe's incentive-based remuneration package:

 

 

Six Months Ended

Six Months Ended

 

30 June 2018

30 June 2017

 

Unaudited

Unaudited

 

£

£

 

 

 

 

Share option cost

 

66,055

-

 

66,055

-

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Information cont'd

 

12. Events after the reporting date

 

There are no disclosable events following the reporting date.

 

13. Control

There is no ultimate controlling party

 

 

 

Statement of Directors' Responsibilities

 

We confirm that to the best of our knowledge:

 

•the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

 

•the interim management report includes a fair review of the information required by:

 

(a)DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(b)DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so

 

The directors of Maistro plc are listed in and are unchanged from those disclosed in the Maistro plc Annual Report for 31 December 2017, with the exception of Ian Cleverly, who was appointed to the Board on 9 April 2018.

 

By order of the Board

 

 

David Rowe

Chairman

 

 

 

 

David Rowe

27th September 2018

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR GMGZLFVZGRZZ
Date   Source Headline
27th Jun 20197:00 amRNSSecondary Trading following Cancellation
25th Jun 20195:30 pmRNSMaistro
21st Jun 201912:31 pmRNSHolding(s) in Company
13th Jun 20192:17 pmRNSResult of General Meeting & Notice of Cancellation
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28th Mar 20197:00 amRNSSurrender and Grant of Share Options
22nd Mar 20197:00 amRNSFinal Results
6th Feb 20196:16 pmRNSHolding(s) in Company
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29th Jan 20195:21 pmRNSHolding(s) in Company
29th Jan 201911:52 amRNSResult of General Meeting and Total voting rights
25th Jan 20191:02 pmRNSGrant of Share Options
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11th Jan 20197:00 amRNSWhitewash Circular
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10th Dec 20182:00 pmRNSHolding(s) in Company
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28th Nov 201811:30 amRNSPosting of Circular
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6th Sep 20187:00 amRNSNotice of Interim Results Date and Business Update
29th Aug 20189:52 amRNSIssue of shares and total voting rights
16th Aug 20187:00 amRNSPDMR Shareholding
25th Jul 20189:45 amRNSPDMR Shareholding
23rd Jul 20181:38 pmRNSPDMR Shareholding
21st Jun 201812:00 pmRNSResult of Annual General Meeting
14th Jun 201812:08 pmRNSHolding(s) in Company
24th May 20187:00 amRNSNotice of AGM
18th May 201812:17 pmRNSPDMR Shareholding
9th May 201811:02 amRNSHolding(s) in Company
1st May 20189:55 amRNSPDMR Shareholding - Correction
1st May 20187:00 amRNSPDMR Shareholding
19th Apr 20185:27 pmRNSGrant of Share Options

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