Rosslyn Data Tech. - Final Results

Rosslyn Data Technologies plc

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

Rosslyn Data Technologies plc

("Rosslyn", "RDT" or the "Company")

Audited Results

For the year ended 30 April 2018

Rosslyn Data Technologies plc (AIM: RDT), the provider of a leading cloud-based enterprise data analytics platform, is pleased to announce its audited results for the year ended 30 April 2018.

Financial Summary

For the Financial year ending 30^th April 2018 the Group has amended its accounting policy to introduce IFRS 15 reporting standards covering the recognition of revenue from contracts with customers a year ahead of the statutory requirement.  This has impacted the results and comparatives compared to the previously applied policy in place last year and announced in the Interim statement. We made this decision as we would need to restate both this year's and next year's accounts if we did not adopt the policy in this financial year. In the Financial summary below, both sets of numbers are provided for comparison.

·     Group Revenues of £6.4m (£7.0m under prior policy) up 83% (2017 - £3.5m)

·     Loss before tax of £3.7m (£3.0M under prior policy) (2017 - £2.0m)

·     Cash as at 30^th April 2018 stands at £0.3m (2017 - £0.3m)

·     Gross Margin remains strong at 76.1% (2017 - 81.4%)

·     Continued prudent financial and operational management delivered expected group synergies of more than £0.8m

Operational Highlights

·     Continued demand for data analytics demonstrated by encouraging growth in revenues;

·     Sales team has seen an improvement in key metrics and continues to win contracts in respected global companies;    

·     Successful integration of the Integritie acquisition has provided greater opportunities reflected in our growing contract values;

·     Revenues generated from existing clients have accelerated as the 'land and expand' strategy bears fruit, driven by broader adoption of the platform and the release of new products;

·     New client onboarding and higher levels of contracted recurring revenues during the period, with the majority of new direct contracts being multi-year deals. Revenue per contracted year has increased to circa £82,000 (2017 - £72,000).

·     Client renewal rates remain strong with churn rate remaining below 5%;

·     Our business model provides the Group with a powerful foundation from which to generate further business.  The Directors will leverage these existing relationships to expand overseas and enter new verticals;

·     The RAPid and KC applications provide an integral service within the business functions of RDT's partners, freeing up valuable resources, enabling them to focus on building new, higher margin revenue streams and giving them greater speed and agility to respond to changing client needs;

·     The Group has continued to focus on R&D during the period, as part of our commitment to investing in the development of our product.  Focus has been on scalability and automation, and providing customers with self-service tools to manage their data. This enables our clients to rapidly gain data insights, identify opportunities and profit from these whilst minimising costs and risks;

·     Our focus on developing intuitive, user friendly, and automated workflows for data preparation combined with fast application development and an app platform, is becoming increasingly pervasive. By building easy to use automated technologies we are significantly shortening the time it takes for our clients and partners to receive analytics ready data, driving down the cost of investment and increasing their ROI, whilst reducing the Group's costs;

·     Encouraging pipeline of work coming through direct and indirect sales channels and increasing average contract value.

Commenting on today's results Roger Bullen, CEO of Rosslyn, said, "I am pleased to report that the Group has made good progress during the financial year and has successfully integrated the Integritie acquisition. We have been able to expand our solutions into one platform with multiple solutions - all focused on bringing together structured data, unstructured information, automated workflows for business process improvement, and analytics. Furthermore, our growing partnership with Microsoft and IBM extend our reach, enabling us to develop, introduce and incorporate cutting-edge technologies. Since the year end, we have been able to secure significant client wins and aim to continue to do so for the remainder of the year.

We have continued to invest in the development of our talented team, making key hires in sales, customer service and R&D.  The addition of these key people ensures that our product offering remains market-leading and that we provide the highest levels of service possible to our clients.  Our continued development of our product set is exciting, and seeing the RAPid platform being enhanced with the Knowledge Capture tool set (KC) and being progressively embedded in a number of organisations is encouraging.

We have a broad pipeline of new business and we are excited about the year ahead."

Chairman's Statement

Results

The financial year to 30 April 2018 was our fourth full year as a public company for Rosslyn Data Technologies plc after the listing on AIM in April 2014. The platform we have built over the period has again received significant accolades this year, maintaining our belief that the ongoing development and improvements we have made in developing and maintaining a state-of-the-art cloud-based solution are significant.

This year, we have acquired 100% of the share capital of Integritie (UK) Limited, increasing our revenues significantly whilst also growing both our partnerships and our direct sales client base. Cost savings were realised by combining back-office and some front-office functions.

We have continued to deploy our resources into our partnership, direct sales and marketing strategies, whilst ensuring we did not miss any developments that would enable the business to transform to profitability and organic cash generation. As reported, the progress this year was not as rapid as we would have liked; the uncertainty with Brexit, the economic turmoil within Europe and the strength of the US$ have presented difficult trading times for some of our partners and clients, which has led to a slowdown in the execution of some larger contracts.

This year we have also implemented, earlier than required, IFRS 15 accounting standards. This has led to a change in revenue recognition policy, which has moved license fee revenues from the current year to next. We will be adopting this accounting treatment going forward. We made this decision as we would need to restate both this year's and next year's accounts if we did not adopt the policy in this financial year. Group revenue was £6.4m (2017: £3.5m). Based on our revenue recognition policy from prior years our revenues were £7.0m (2017: £3.6m), showing >90% growth over last year.

In addition to this growth we have been able to manage our cost base down and we are now able to see a timeline when cash flow break-even and profitability occur; although we are not yet complete, we believe there is a strong chance of this occurring by the second half of this new financial year.

We ended the year with net cash balances of £0.3m (2017: £0.3m). The Board believes that we have adequate cash resources to take the Group through to break-even and cash generation.

Strategy

The Group's strategy has continued from last year with the appointment of Roger Bullen as CEO. The platform is established as a significant player in cloud-based analytics, delivering far more than the "spend" environment we have focused on for the last three years. The introduction of Integritie has added new technologies and business opportunities, and we have been able to exploit these alongside the RAPid platform to offer services outside of our traditional spend environment. We are committed to growing revenues and profitability through a dual track strategy of acquisition and organic growth. The acquisition of Integritie, in May 2017, demonstrates our determination to add new products and revenue streams to our platform and introduce new customers to the cloud.

Whilst we look at acquisition opportunities, to increase our scale and offering, we will also focus on developing the current relationships with our partners. We have been able to add more partners to our portfolio and have significantly expanded our relationship with Dun & Bradstreet, the world's largest data provider. We have confidence that these partnerships and relationships will continue to grow and flourish. We are particularly excited by the new opportunities we are discovering with partners in North America and we are hopeful that we can continue to expand our footprint in this region in the months ahead.

Our staff

Our business would be nothing without our innovative and hard-working staff. From the development team to the client support staff, it is an end-to-end effort. Each role is critical to our continued success, and everyone has positively contributed to our successful integration of the Integritie acquisition. On behalf of the Board I would like to thank all of them for their outstanding efforts in the last year and look forward to working with them in the current year.

Outlook

The 2018-19 financial year is going to be a breakthrough year. We anticipate a cash flow positive year and profitability being achieved. We also see new clients and new products being introduced, whilst also re-establishing some of the key relationships from the past. Our partnership strategy continues to develop and is coming to fruition in the US; these partnerships have the potential to deliver the majority of our revenue over the coming years. This, alongside the strengthening traction within our direct sales, makes this an exciting year for us.

Recent announcements demonstrate the high regard which major players within the

data and analytics industry hold Rosslyn, the RAPid platform and the Knowledge Capture environment. Converting these relationships into scalable revenue streams is key for our growth and our future. I am optimistic that recent product launches and the innovation we continue to deliver will drive the results the Company and our shareholders deserve.

Results

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30^th April 2018

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30^th APRIL 2018

CONSOLIDATED STATEMENT OF CASH FLOWS

for the Year ended 30 April 2018

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.   General Information

Rosslyn Data Technologies plc (the "Company") is a company domiciled in the UK. The address of the registered office is 60 St Martin's Lane, London, WC2N 4JS. The Company is the ultimate parent of Rosslyn Analytics Ltd and Integritie (UK) Ltd. companies incorporated in the UK, and the ultimate parent of Rosslyn Analytics Inc., a company incorporated in the United States of America (collectively the "Group"). The Group's principal activity is the provision of data analytics using a proprietary form, data capture, data mining and workflow management.

The principal accounting policies adopted in the preparation of the consolidated financial information are set out below.

2.   Accounting Policies

Basis of preparation

The Group's consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards (as adopted by the EU) and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Going Concern

Notwithstanding that the Group has made losses in the current year, these financial statements have been prepared on the going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future. The Directors have prepared cash flow statements for the periods to 30 April 2025 to ensure going concern criteria are met. Provided the Group achieves its forecasts for the forthcoming year, the Group will be able to repay all outstanding loan notes and be in a cash positive position. Should the Group fall short of its revenue forecast it will need to refinance the outstanding loan notes, discussions are already taking place to ensure that financing, should it be required, is available.

The directors have concluded that the combination of these circumstances represents a material creates uncertainty that casts significant doubt upon the Group's ability to continue as a going concern. Nevertheless, after making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing these financial statements. 

Basis of Consolidation

On 23 April 2014 the Company acquired the Group's previous parent company, Rosslyn Analytics Ltd, via a share for share exchange whereby every ordinary share and A preference share in Rosslyn Analytics Ltd was exchanged for eight ordinary shares and eight A preference shares respectively in Rosslyn Data Technologies Ltd (prior to the conversion to a plc on 24 April 2014). On 24 April 2014 the A preference shares were converted into ordinary shares on a one-for-one basis.

On 29 April 2014, Rosslyn Data Technologies plc's shares were admitted to trading on AIM. Accordingly these financial statements are presented in the name of the new legal parent, Rosslyn Data Technologies plc, but are a continuation

of the financial statements of Rosslyn Analytics Ltd.

The Annual report will be available on the Company's website for download by 7^th October 2018 and the Annual General Meeting will be held on 30^th October at 11am, 154 - 160 Fleet Street, Blackfriars, London, EC4A 2DQ