25 Apr 2013 07:00
25 April 2013
Nasstar plc
("Nasstar" or the "Company")
Interim results for the six months ended 31 March 2013
Nasstar plc ("Nasstar" or the "Company"), which provides Hosted Desktop cloud computing, announces its half-year results for the six months ended 31 March 2013.
Key highlights for the period:
·; 15% increase in live Hosted Desktop subscribers since October 2012, up to 2,100
·; 44% increase in Hosted Desktop subscribers under contract since October 2012, up to 2,600
·; Fastest rate of order book growth since sales of Hosted Desktop began
·; Investment in a new sales team to accelerate the Company's revenue growth
·; Turnover for the period of £1.0m (6 months to 31 March 2012: £1.1m)
·; EBITDA* loss for the period of £190,000 (6 months to 31 March 2012: £35,000)
·; Goodwill and deferred tax asset impairment accounted for during the period
·; £880,000 new capital raised (before expenses)
·; Appointment of Angus McCaffery as a non-executive Director.
*Earnings before interest, taxation, depreciation, amortisation and share-based payments
Chairman's statement
The Board's key objective for this year is to accelerate growth of the Company's key Hosted Desktop product. Since the start of the current financial year, orders for Hosted Desktop have risen by 44%, representing the fastest-growing order book since sales of this product began. The Hosted Desktop subscriber additions come against the loss of a substantial number of users as a result of the end of our fixed term contract with Allied Healthcare in September last year, as previously announced.
We have recently recruited new members of our sales team and increased our marketing budget. We believe this investment in our sales structure will deliver faster growth in the second half of the current financial year and into next year. We expect the increased sales resource to shorten the time it will take the Company to reach scale and profitability.
We received an additional equity investment during the period of £880,000 (before expenses), and were delighted to add a new major institution to our shareholder base as a result of this fundraising. This extra capital has enabled us to complete the investment in our transformational multi-site data centre project earlier than planned and invest in our sales and marketing activities. This investment has been undertaken in anticipation of sales growth, which we expect to continue to accelerate during the second half of the current financial year.
Directorate change
Damion Greef has today resigned as a Director of the Company with immediate effect in order to pursue other business interests. Damion has served the Company over the past seven and a half years as both a non-executive and then as an executive Director. The Board would like to thank him for his contribution to the Company's growth and wish him the best for the future.
In March we announced that Angus McCaffery had joined the Board as a non-executive Director. Angus brings with him substantial sales experience, having been a co-founder and Sales Director of Maintel Holdings plc (LSE AIM: MAI) over the last 20 years. He co-founded Maintel Europe in 1991 and was appointed sales director of Maintel Holdings plc in 1996. He is already providing us with valuable advice on developing our sales function.
Outlook
We are excited about accelerating growth in our revenues and subscriber numbers and are confident that we have put in place the right structure to maximise the potential of the substantial pipeline of opportunities that we currently have.
Additional investment in our sales and marketing functions has resulted in us incurring higher costs ahead of receiving the benefit of increased revenues. This expenditure on sales and marketing, combined with the additional depreciation from investment in our data centre infrastructure to capitalise on our growing momentum will result in additional costs being incurred in the current financial year. In addition the Directors have elected to impair fully the Group's goodwill (£844k) and deferred tax assets (£175k) in the period.
Lord Daresbury
Chairman
25 April 2013
Contacts:
Nasstar plc | |
Charles Black, Chief Executive Officer
| 020 7148 5000 |
Allenby Capital Limited, Nominated Adviser and Broker | |
Nick Naylor James Reeve | 020 3328 5656
|
Gresham PR Limited 07866 805108
Neil Boom
About Nasstar plc
Nasstar (www.nasstar.com) provides hosted desktop and hosted exchange cloud computing services that enable subscribers to access their corporate desktop, files, applications and email in the cloud rather than using local hard drives. Hosted Desktop is a highly scalable service that provides benefits including anywhere access to computing, a standardised corporate desktop solution that can be accessed globally and in multiple languages and cost savings when compared to the traditional IT ownership model, replacing capital expenditure with a simple usage based payment model.
Nasstar was founded in 1998 by Charles Black. Nasstar plc was admitted to trading on the London Stock Exchange's Alternative Investment Market in December 2005 (AIM: NASA).
Nasstar plc
Consolidated statement of comprehensive income
for the six months ended 31 March 2013
Note | Six months to 31 March 2013 Unaudited £000
| Six months to 31 March 2012 Unaudited £000 | Year to 30 September 2012Audited £000 | |||
Revenue | 980 | 1,133 | 2,391 | |||
Cost of sales | (629) | (513) | (1,113) | |||
Gross profit | 351 | 620 | 1,278 | |||
Operating and administrative expenses | (805)
| (770) | (1,592) | |||
Impairment of goodwill | 5 | (844) | - | - | ||
Share-based payments | (9) | (18) | (36) | |||
Total operating and administrative expenses | (1,658) | (788) | (1,628) | |||
Operating loss | (1,307) | (168) | (350) | |||
Finance expense | (26) | (20) | (44) | |||
Finance income | 7 | 6 | 11 | |||
Loss before taxation | (1,326) | (182) | (383) | |||
Taxation | (174) | - | 70 | |||
| ||||||
| ||||||
Loss for the period attributable to shareholders | (1,500) | (182) | (313) | |||
| ||||||
Loss per share: | ||||||
Basic and diluted | 6 | (2.7)p | (0.3)p | (0.6)p | ||
Nasstar plc
Statement of financial position
as at 31 March 2013
| 31 March 2013 Unaudited £000
| 31 March 2012 Unaudited £000 | 30 September 2012 Audited£000 | |||
Assets | ||||||
Non-current assets | ||||||
Goodwill | - | 844 | 844 | |||
Intangible assets | 346 | 316 | 348 | |||
Plant and equipment | 663 | 378 | 456 | |||
Deferred taxation | - | 175 | 175 | |||
1,009 | 1,713 | 1,823 | ||||
Current assets | ||||||
Trade and other receivables | 425 | 464 | 581 | |||
Cash and cash equivalents | 880 | 709 | 513 | |||
1,305 | 1,173 | 1,094 | ||||
Total assets | 2,314 | 2,886 | 2,917 | |||
Equity and liabilities | ||||||
Capital and reserves attributable to equity holders | ||||||
Share capital | 618 | 537 | 538 | |||
Share premium | 4,717 | 3,952 | 3,957 | |||
Merger reserve | 662 | 662 | 662 | |||
Retained deficit | (4,316) | (2,712) | (2,825) | |||
Total equity | 1,681 | 2,439 | 2,332 | |||
Non-current liabilities | ||||||
Interest-bearing loans and borrowings | 141 | 41 | 50 | |||
Current liabilities | ||||||
Interest-bearing loans and borrowings | 169 | 50 | 98 | |||
Trade and other payables | 323 | 356 | 437 | |||
492 | 406 | 535 | ||||
Total liabilities | 633 | 447 | 585 | |||
Total equity and liabilities | 2,314 | 2,886 | 2,917 | |||
Nasstar plc
Statement of cash flows
for the six months ended 31 March 2013
Six months to 31 March 2013 Unaudited £000 | Six months to 31 March 2012 Unaudited £000 | Year to 30 September 2012Audited £000 | |||
Cash flow from operating activities | |||||
Operating loss | (1,307) | (168) | (350) | ||
Adjustments for: | |||||
Depreciation and amortisation | 1,110 | 185 | 419 | ||
Share-based payments | 9 | 18 | 36 | ||
Corporation tax receipts | 71 | - | 70 | ||
Net cash flow from operating activities before changes in working capital | (117) | 35 | 175 | ||
Decrease/(increase) in trade and other receivables | 86 | (20) | (142) | ||
(Decrease)/increase in trade and other payables | (114) | (8) | 78 | ||
Net cash flow from operating activities | (145) | 7 | 111 | ||
Investing activities | |||||
Payments for intangible assets | (110) | (127) | (261) | ||
Payments for property, plant and equipment | (361) | (218) | (428) | ||
Net cash flow from investing activities | (471) | (345) | (689) | ||
Financing activities | |||||
Issue of ordinary share capital | 880 | 293 | 306 | ||
Expenses of issue of ordinary shares | (40) | - | (7) | ||
Proceeds from lease-finance arrangements | 253 | - | 140 | ||
Repayment of lease-finance arrangements | (73) | (28) | (92) | ||
Repayment of bank loan | (18) | (18) | (37) | ||
Interest paid | (26) | (20) | (44) | ||
Interest received | 7 | 6 | 11 | ||
Net cash flow from financing activities | 983 | 233 | 277 | ||
Net increase/(decrease) in cash and cash equivalents in the period | 367 | (105) | (301) | ||
Cash and cash equivalents at the beginning of the period | 513 | 814 | 814 | ||
Cash and cash equivalents at the end of the period | 880 | 709 | 513 | ||
NOTES TO THE INTERIM REPORT
1 | Corporate information | |||||
Nasstar Plc ("the Company") is a company incorporated in England and Wales and quoted on the London Stock Exchange's Alternative Investment Market. | ||||||
2 | Basis of preparation | |||||
These condensed interim financial statements of the Company and its subsidiary ("the Group") for the six months ended 31 March 2013 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs). The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 30 September 2012. While the financial figures included within this half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as set out in IAS34. | ||||||
These condensed interim financial statements do not constitute Statutory Accounts under the Companies Act 2006, have not been audited, and do not include all of the information required for full annual financial statements. They should be read in conjunction with the Group's consolidated annual financial statements for the year ended 30 September 2012. The auditors' opinion on those Statutory Accounts was unqualified and did not draw attention to any other matters required by the Companies Act 2006. The Statutory Accounts for the year ended 30 September 2012 have been delivered to the Registrar of Companies. | ||||||
The comparative figures presented are for the six months ended 31 March 2012 and the year ended 30 September 2012. | ||||||
3 | Total comprehensive income | |||||
There are no additional items of income and expense which are not included within the statement of comprehensive income. | ||||||
4 | Segmental analysis | |||||
A segment is a distinguishable component of the Group that is engaged in providing products or services in a particular business sector (business segment) or in providing products or services in a particular economic environment (geographic segment), which is subject to risks and rewards that are different in those other segments. | ||||||
The Group operated in the period in one segment, the provision of software as a service, and in one market, the United Kingdom. The disclosures required by IFRS8 relating to profits, losses, assets and liabilities of the segment are therefore shown by the financial statements as a whole. | ||||||
5 | Impairment of goodwill | |||||
The goodwill was attributable to the Group's sole business segment which is also the cash-generating unit level at which it is assessed for impairment. The carrying value of goodwill has been determined using a discounted cash flow projection and on a value-in-use basis.
Revenues for the six months to 31 March 2013 were 5% below expectations. The Group is anticipating further growth in its 'cloud computing' products; however, market conditions remain difficult, creating uncertainty over the recoverability of the amount attributed to goodwill. | ||||||
6 | Loss per share | |||||
The calculation of the basic loss per share for the six months ended 31 March 2013 is based upon the following: | ||||||
Six months to 31 March 2013 Unaudited
| Six months to31 March 2012 Unaudited
| Year to 30 September 2012 Audited
| ||||
Weighted average number of shares in issue | 54,910,738 | 52,172,648 | 52,727,892 | |||
Loss attributable to shareholders of the parent | £1,500,000 | £182,000 | £313,000 | |||
Loss per 1p ordinary share | (2.7)p | (0.3)p | (0.6)p | |||
The diluted loss per share for all periods is the same as the basic loss per share as the losses have an anti-dilutive effect. | ||||||
7 | Dividend | |||||
No dividend has been paid or proposed in the period. | ||||||