I am pleased to report increased first half revenue in the six month period to 30 September 2019 compared to the prior year period resulting in increased EBITDA and a strengthened cash position.
- Sales of GBP726,000, an increase of 12% compared to H1 FY19
- EBITDA profit of GBP147,000 a decrease of 18% compared to H1 FY18 principally due to exceptional legal and professional costs of GBP80,000 in the period relating to the offer by True Commerce to acquire Netalogue
- Net assets of GBP977,000, an increase of 36% compared to H1 FY19
- Cash at bank of GBP981,000 an increase of 51% compared to H1 FY19
- No bad debt provisions
- The group continues to have no loans, overdrafts or borrowings
We have had a good start to FY20 with an improved H1 performance (over the previous year), despite considerable distractions to the business. Sales have increased by GBP79,000 compared to the prior period, and we maintain a solid pipeline for H2. The increase in sales is principally attributed to an increase in both licences and aftercare services and we maintain a solid pipeline for H2. Gross profit has increased by GBP53,000 to GBP683,000 driven by the increase in sales activity.
Whilst we continue to maintain a focus on cost control we did forecast a moderate increase in costs - and resultant decrease in EBITDA position - as a consequence of our recent agreement with True Commerce. This is reflected in administrative costs being GBP82,000 higher than the prior period at GBP200,000, principally attributable to an increase in legal costs and corporate advisor costs.
On Tuesday 10th December we announced the acquisition of Netalogue Technologies PLC by TrueCommerce Holdings Limited and withdrawal from NEX Exchange. A wholly amicable agreement strongly supported by the Netalogue board.
The acquisition of Netalogue by True Commerce comes as a direct consequence of the 3-year strategy plan we created in 2017 to invest significantly to develop a world-class, B2B e-Commerce platform; build out our routes-to-market through both direct and increasingly indirect means; and to remain profitable and cash generative. The attraction of Netalogue to True Commerce is therefore abundantly clear: a market leading e-commerce platform, with great product fit within a growing family of enterprise class, e-commerce software.
For the Netalogue product the enhanced brand presence and stature of True Commerce should lead to a ramped acquisition of new clients and the opportunity to up-sell and cross-sell existing clients due to the unique proposition in the market place, the Netalogue B2B platform will become part of a complementary family of products providing 100% coverage of all e-business channels – ecommerce, punchout and EDI – coupled with solutions for Vendor Managed Inventory (VMI) and Product Information Management (PIM). The investment by TrueCommerce both protects and enhances the solution for Netalogue’s existing clients who will soon be able to take advantage of these new options.
Finally I should like to thank our shareholders for their investment in Netalogue and my fellow board members, Andrew Robathan, Craig Williams and Richard Condon, for their professional endeavours and support in driving our business plan to a successful outcome.
Netalogue Technologies plc
Netalogue Technologies PLC
Consolidated profit and loss account
for the period ended 30 September 2019
|Six months ended 30 Sept 2019||Six months ended 30 Sept 2018|
|Cost of sales||(43)||(17)|
|Net operating expenses||(540)||(488)|
|Operating profit before depreciation and amortisation||147||180|
|Amortisation of intangible assets||-||(35)|
|Operating profit on ordinary activities before taxation||143||142|
|Tax on profit on ordinary activities||(27)||-|
|Profit for the period||116||142|