RNS Number : 3245F
itim Group PLC
24 September 2024
 

 

24 September 2024

itim Group plc

("itim" or the "Company" and with its subsidiaries the "Group")

Interim Results for the six months ended 30 June 2024

itim Group plc (AIM:ITIM) a SaaS based technology company that enables store based retailers to optimise their businesses to improve financial performance, is pleased to announce its unaudited interim results for the six months ended 30 June 2024.

Financial Highlights

·   

Group revenue increased by 19% at £8.8m (HY23: £7.4m), driven by both new contract wins and higher levels of service revenue

 

·   

Annual recurring revenue ("ARR")1 of £13.2m

 

·   

Significant increase in adjusted EBITDA2 to £1.2m (HY23: loss of (£0.2m), FY23: £0.7m) through increased sales activity in H1 24, while maintaining a tight control of costs

 

·   

Materially improved adjusted EBITDA2 margin of 13% (HY23: (3)%, FY23: 4%)

 

·   

(Loss)/profit before tax (£0.1m) (HY23: (£1.1m), FY23: (£1.1m))

 

·   

Adjusted Earnings per share3 0.18 pence (HY23: (3.02p), FY23: (2.86p))

 

·   

Strong cash generation in the period, resulting in net cash of £3.0m (FY23: £1.9m, HY23: £2.7m)

 

1. Annual recurring revenue

2. EBITDA has been adjusted to exclude share-based payment charges, exceptional items, along with depreciation, amortisation, interest and tax from the measure of profit.

3. The profit measure has been adjusted to exclude exceptional items and share option charge

 

Ali Athar, CEO of itim, commented: "I am pleased to report that itim is gaining significant traction in the market. Our half-year results demonstrate measurable progress across key metrics and we are delighted to report a significant increase in revenue, a positive EBITDA return and a strong cash position.

"As a consequence of the positive momentum, including new contract wins, in addition to encouraging trading since the beginning of H2, the Board anticipates delivering full year results ahead of current market expectations."

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Enquiries:

Itim Group plc

Ali Athar, CEO

Ian Hayes CFO

 

0207 598 7700

Zeus (NOMAD & Broker)

Katy Mitchell

Harry Ansell

Darshan Patel

 

0203 829 5000

IFC Advisory

Graham Herring

Florence Chandler

0207 3934 6630

 

ABOUT ITIM

itim was established in 1993 by its founder, and current Chief Executive Officer, Ali Athar. itim was initially formed as a consulting business, helping retailers effect operational improvement. From 1999 the Company began to expand into the provision of proprietary software solutions and by 2004 the Company was focused exclusively on digital technology. itim has grown both organically and through a series of acquisitions of small, legacy retail software systems and associated applications which itim has redeveloped to create a fully integrated end to end Omni-channel platform.

 

CEO Statement

I am pleased to report that our Company is gaining significant traction in the market. Our half-year results demonstrate measurable progress across key metrics.  In the three years since our successful IPO, we have strategically invested the capital raised to expand our product portfolio and enhanced our core capabilities. 

 

Revenue for the six month period was £8.8m (HY23: £7.4m) an increase of 19%, of which recurring revenues were £6.6m (HY23: £6.4m) representing 75% of sales and underpinning future sales. Adjusted EBITDA (EBITDA excluding share-based payment charges and exceptional items) increased significantly to £1.2m from a loss of £0.2m last year. The loss before tax has been reduced materially to £0.1m (HY23: loss £1.1m). Cash balances also improved to £3.0m at the period end (FY23: £1.9m). Adjusted profit per share was 0.18p (HY23: loss 3.02p). (For adjustments see Financial Highlights).

 

Our recent announcements underscore the growing confidence that both existing customers and prospects are placing in our platform. This positive momentum is a testament to our team's dedication and the value we deliver to our clients.

 

We have also refined our branding and positioning to better communicate our unique value proposition. When retail executives ask us, who we are, and what we do, and what makes us different:

 

The answer is clear.

We are 'retail engineers' specialising in the transformation of retail businesses into high-performing organisations through technology enablement. Our mission is to guide retailers towards omni-channel excellence and facilitate their transition to a customer-centric Unified Retail Business Model.

Our definition of high performance is ambitious yet achievable: for our clients - we target sales increases of 30-50% and profit improvements of 50-100%. While these figures may seem bold, our case studies demonstrate their feasibility. We believe that recent technological advancements have created a once-in-a-decade opportunity for a step change in retail productivity.

Our Approach

We focus on five areas to drive transformational change:

 

·      Enhanced Customer targeting and engagement

·      End-to-end process integration for increased efficiency and effectiveness

·      Elevated omni-channel service and convenience to improve customer experience

·      Digital connectivity with consumers (mobile) and suppliers (marketplace strategies)

·      AI-driven optimisation of critical processes:

Sales & Marketing

The Assortment (Merchandising)

The intake of stock

Stock and space distribution

Price and promotions

These efforts culminate in a significant performance uplift for our clients.

This is enabled by our UNIFY platform, with its four pillars of sales, stock, price & supply, which supplements or replaces elements of the retailer's system stack, as appropriate.  We have 80 customers using elements or the end-to-end platform.   We do this cost-effectively with minimum CAPEX expenditure.

 

Our Unique Market Position

Our approach distinguishes us from competitors in several key ways:

1.    As retail engineers, we go beyond consulting to provide actionable solutions

2.    We build upon retail expertise and best practices to deliver tangible results

3.    Our focus is on the end-to-end operating model, and end-to-end processes, which is different from competitors, who as best of breed providers, focus on functional excellence

4.    We are not software salesmen, but use our UNIFY platform to supplement and replace part of a retailer's system stack to deliver end-to-end excellence

5.   Our emphasis is on delivering outcomes, with software serving as a critical enabler

The recent appointment of a former McKinsey partner as non-executive Chairman reinforces our commitment to delivering high-value solutions and strengthening our services revenue. This strategic move, coupled with our growing subscription revenues should take us to the goal of becoming cash generative again and over the coming years see more retailers move onto our platform.

In conclusion, I am excited about the future of our Company. We have a clear vision, a defined purpose, a unique market position, and a growing base of supportive customers. Our value proposition is both exciting and tangible, and I am confident in our ability to drive continued growth and success in the retail transformation space.

Outlook

As a consequence of the positive momentum, including new contract wins, in addition to encouraging trading since the beginning of H2, the Board anticipates delivering full year results ahead of current market expectations.

 

Consolidated Statement of Comprehensive Income

for the half-year ended 30 June 2024

 



Six month period ended

30 June 2024

Six month period ended

30 June 2023

Year ended

31 December 2023



Unaudited

Unaudited

              Audited


Notes

£000

£000

£000

Continuing operations





Revenue


8,835

7,425

16,130

Cost of sales


(5,451)

(5,514)

(11,090)

Gross profit


3,384

1,911

5,040






Administrative expenses


(2,233)

(2,108)

(4,356)

EBITDA


1,151

(197)

684






Amortisation of intangible assets


(702)

(574)

(1,146)

Share option charge


-

-

-

Depreciation


(30)

(23)

(49)

Depreciation of leased assets


(299)

(275)

(545)

Profit/(Loss) from operations


120

(1,069)

(1,056)






Exceptional


(141)

-

-

Other interest - right of use assets


(52)

(21)

(41)

Loss before taxation


(73)

(1,090)

(1,097)






Taxation


(12)

149

205

Loss for the period/year


(85)

(941)

(892)






Other comprehensive income





Exchange differences on retranslation of foreign operations


(57)

(77)

(56)






Total comprehensive income for the period/year net of tax


(142)

(1,018)

(948)






Earnings per share





Basic

2

(0.27p)

(3.02p)

(2.86)p

Diluted

2

(0.27p)

(3.02p)

(2.86)p

 

 

Consolidated Statement of Financial Position

as at 30 June 2024

 

 

 

As at

30 June 2024

As at

30 June 2023

As at

31 December 2023

 

 

 

Unaudited

Unaudited

Audited

 

 

 

£000

£000

£000

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible assets

 

11,163

10,349

11,109

 

Plant and equipment

 

316

586

476

 

Right-of-use assets

 

938

380

1,058

 

Deferred tax

 

-

83

13

 

 

 

12,417

11,398

12,656

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Trade and other receivables

 

4,062

4,537

5,385

 

Cash and cash equivalents

 

2,976

2,697

1,930

 

 

 

7,038

7,234

7,315

 

 

 

 

 

 

 

Total assets

 

19,455

18,632

19,971

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

 

(6,146)

(5,673)

(6,398)

 

Right-of-use liability

 

(308)

(214)

(287)

 

 

 

(6,454)

(5,887)

(6,685)

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Trade and other payables due in more than one year

 

(248)

(444)

(347)

 

Right-of-use liability

 

(669)

(209)

(795)

 

Deferred tax

 

(697)

(633)

(615)

 


 

(1,614)

(1,286)

(1,757)

 

 

 

 

 

 

 

Total liabilities 

 

(8,068)

(7,173)

(8,442)

 

 

 

 

 

 

 

Net Assets

 

11,387

11,459

11,529


 

 

 

 

 

 

Capital and reserves

 

 

 

 

 

Called up share capital

 

1,561

1,561

1,561

 

Share premium account

 

7,398

7,398

7,398

 

Share options reserve

 

513

513

513

 

Capital redemption reserve

 

1,103

1,103

1,103

 

Foreign exchange reserve

 

37

73

94

 

Retained profit/(loss)

 

775

811

860

 

Shareholders' funds

 

11,387

11,459

11,529

 

 

 

Consolidated Statement of Cash Flow

for the half-year ended 30 June 2024

 

 

 

 

 

 

 

Six month period ended

30 June 2024

Six month period ended

30 June 2023

Year ended

31 December 2023

 

 

Unaudited

Unaudited

Audited

 

 

£000

£000

£000

Cash flows from operating activities

 

 

 

 

Profit after taxation

 

(85)

(941)

(892)

Adjustments for:

 

 

 


Taxation

 

12

(149)

(205)

Share option charge

 

-

-

-

Other interest on leases

 

52

21

41

Amortisation and depreciation

 

1,031

872

1,740

Cash flows from operations before working capital changes

 

1,010

(197)

 

684

 

Movement in trade and other receivables

 

1,397

305

(1,297)

Movement in trade and other payables

 

(237)

(59)

678

 

 




Cash generated from operations

 

2,170

49

65

Corporation tax

 

(18)

(23)

462

Net cash flow from operating activities

 

2,152

26

527

 

Cash flow from investing activities

 




Capital expenditure on intangible assets

 

(797)

(906)

(1,870)

Purchase of plant and equipment

 

(6)

(24)

(77)

Stamp duty on ROU lease renewal

 

-

-

(6)

Net cash flow from investing activities

 

(803)

(930)

(1,953)

 

 




Cash flow from financing activities

 




Interest repayments

 

-

(16)

(16)

Payment of lease liabilities

 

(293)

(266)

(528)

Loan issued

 

-

(18)

-

Net cash flow from financing activities

 

(293)

(300)

(544)

 

 

 

 


Net increase/(decrease) in cash and cash equivalents

 

1,056

(1,204)

(1,970)

 

 




Cash and cash equivalents at beginning of year

 

1930

3,922

3,922

Exchange (losses)/gains on cash and cash equivalents


(10)

(21)

(22)

 

 




Cash and cash equivalents at end of year

 

2,976

2,697

1,930

 

Consolidated Statement of Changes in Equity

as at 30 June 2024

 

Share

capital

Share

Premium

Share option reserve

Capital Redemption Reserve

Foreign exchange reserve

Retained

Earnings

Total

Equity

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

At 1 January 2024

1,561

7,398

513

1,103

94

860

11,529

 








Comprehensive income for the year

-

-

-

-

-

(85)

(85)

Foreign exchange movement

-

-

-

-

(57)

-

(57)

Total comprehensive income

-

-

-

-

(57)

(85)

(142)

At 30 June 2024 (unaudited) 

1,561

7,398

513

1,103

37

775

11,387

 

 

 

 

 

At 1 January 2023

 

 

 

 

 

1,561

 

 

 

 

 

7,398

 

 

 

 

 

513

 

 

 

 

 

1,103

 

 

 

 

 

150

 

 

 

 

 

1,752

 

 

 

 

 

12,477

 

 

 

 

 

 

 

 

Comprehensive income for the year

-

-

-

-

-

(941)

(941)

Foreign exchange movement

-

-

-

-

(77)

-

(77)

Total comprehensive income

-

-

-

-

(77)

(941)

(1,018)

At 30 June 2023 (unaudited) 

1,561

7,398

513

1,103

73

811

11,459

 

 

 

 

 

 

 

At 1 January 2023

 

 

 

 

 

 

 

1,561

 

 

 

 

 

 

 

7,398

 

 

 

 

 

 

 

513

 

 

 

 

 

 

 

1,103

 

 

 

 

 

 

 

150

 

 

 

 

 

 

 

1,752

 

 

 

 

 

 

 

12,477

 

Comprehensive income for the year

-

-

-

-

-

(892)

(892)

Foreign exchange movement

-

-

-

-

(56)

-

(56)

Total comprehensive income

-

-

-

 

(56)

(892)

(948)

 

 

 

 

 

 

 

 

At 31 December 2023 (audited)

1,561

7,398

513

1,103

94

860

11,529


Notes to the Financial Information

 

1.            General information

itim Group plc is a public limited Company ("Company") incorporated in the United Kingdom under the Companies Act 2006 (registration number 03486926). The Company is domiciled in the United Kingdom and its registered address is 2nd Floor, Atlas House, 173 Victoria Street, London SW1E 5NH. The Company's ordinary shares are admitted to trading on the AIM market of the London Stock Exchange ("AIM").

 

The Group's principal activities have been the provision of technology solutions to help clients drive improvements in efficiency and effectiveness. 

 

The Group's interim report and accounts for the six months ended 30 June 2024 have been prepared using the recognition and measurement principles of International Financial Reporting Standards and Interpretations as endorsed by the European Union (collectively "Adopted IFRS").

 

These interim financial statements for the six months ended 30 June 2024 have been prepared in accordance with the AIM Rules for Companies and should be read in conjunction with the financial statements for the year ended 31 December 2023, which have been prepared in accordance with IFRS as adopted by the European Union. The interim report and accounts do not include all the information and disclosures required in the annual financial statements.

 

The interim report and accounts have been prepared on the basis of the accounting policies, presentation and methods of computation as set out in the Group's December 2023 Annual Report and Accounts, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2024, and will be adopted in the 2024 annual financial statements.

 

The interim report and accounts do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. These interim financial statements were approved by the Board of Directors on 23rd September 2024. The results for the six months to 30 June 2024 and the comparative results for the six months to 30 June 2023 are unaudited.  The figures for the period ended 31 December 2023 are extracted from the audited statutory accounts of the Group for that period.

 

The Directors believe that a combination of the Group's current cash, projected revenues from existing and future contracts will enable the Group to meet its obligations and to implement its business plan in full. Inherently, there can be no certainty in these matters, but the Directors believe that the Group's internal trading forecasts are realistic and that the going concern basis of preparation continues to be appropriate.

 

2.            Earnings per share

 

Basic and diluted (loss)/earning per share is calculated by dividing the (loss)/profit attributable to owners of the parent by the weighted average number of ordinary shares in issue during the period. For the avoidance of doubt the deferred shares have been excluded as they have no rights to profits or capital. The Company's share options have a dilutive effect over the two year period.


 

 

6 months ended 30 June 2024

Unaudited

 

 

6 months ended 30 June 2023

Unaudited

 

 

Year ended

31 December 2023

Audited


£000

£000

£000


 

 

 

Loss after tax for the year

(85)

(941)

(892)

Exceptional items

141

-

-

Share option charge

-

-

-

Adjusted loss after tax for the year

56

(941)

(892)




 

Weighted average number of shares



 

Basic - 000

31,211

31,211

31,211

Potentially dilutive share options - 000

3,657

3,657

3,657

Diluted average number of shares - 000

34,868

34,868

34,868

 

 


 

Earnings per share:

 


 

Basic - pence on continuing operations

(0.27)

(3.02)

(2.86)

Diluted - pence on continuing operations

(0.27)

(3.02)

(2.86)





Adjusted earnings - Basic - pence on continuing operations

0.18

(3.02)

(2.86)

Adjusted earnings - Diluted - pence on continuing operations

0.16

(3.02)

(2.86)

 

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