29 July 2024
Quartix Technologies
plc
("Quartix", "the Group" or
"the Company")
Interim
Results
Quartix Technologies plc (AIM:QTX),
a leading supplier of subscription-based vehicle tracking systems,
analytical software and services, is pleased to announce its
unaudited results for the half year ended 30 June 2024.
Financial
highlights:
·
Group revenue increased by 10% to £16.1m (2023:
£14.6m)
o Fleet revenue increased by 10% to £16.0m (2023:
£14.5m)
o Fleet revenue represented 99.3% of total revenue (2022:
98.9%)
·
Adjusted EBITDA1 remained constant at £2.7m
(2023: £2.7m)
·
Operating profit increased by 13% to £2.7m (2023:
£2.4m)
·
Profit before tax increased by 13% to £2.7m (2023:
£2.4m)
·
Diluted earnings per share of 4.49p (2023:
4.16p)
·
Free cash flow2 decreased by 21% to £1.1m
(2023: £1.4m)
·
Interim dividend of 1.50p per share proposed
(2023: 1.50p)
1
Earnings before interest, tax, depreciation,
amortization and share based payment expense (see note
4)
2
Cash flow from operations after tax and investing
activities
Principal activities and
performance measures
The Group's main strategic objective
is to grow its subscription base profitably and develop the
associated annualised recurring revenue.
Annualised recurring revenue has
increased by 11% year on year (see definition in KPI table below).
Annualised recurring revenue is a forward-looking key performance
measure, and it is pleasing that it grew by £3.04m on a constant
exchange rate to £30.94m at 30 June 2024, compared to 30 June
2023.
The Key Performance Indicators used
by the Board to assess the performance of the business are listed
below and discussed in the Chairman's Statement.
Key Performance Indicators
("KPIs")
|
Period ended 30 June
|
2024
|
2023
|
%
change
|
|
Fleet subscriptions1 (new units)
|
37,863
|
33,547
|
13
|
|
Fleet subscription base2
(units)
|
282,922
|
251,787
|
12
|
|
Fleet customer
base3
|
28,586
|
26,337
|
8
|
|
Fleet gross attrition
(annualised)4 (%)
|
14.0
|
13.5
|
|
|
Annualised recurring
revenue5 (£'000)
|
30,940
|
27,972
|
11
|
|
Fleet invoiced recurring
revenue6 (£'000)
|
15,080
|
13,788
|
9
|
|
Fleet revenue (£'000)
|
16,052
|
14,456
|
11
|
|
Change in ASP7
(%)
|
(1.3)
|
(4.6)
|
|
1 New vehicle tracking units subscriptions added to the
subscription base in 6 months to 30 June before any
attrition
2 The number of vehicle tracking units subscribed to the Group's
fleet tracking services, including units waiting to be installed
for which subscription payments have started or are
committed
3 The number of customers associated with the fleet subscription
base
4 The number of new vehicle tracking unit subscriptions, less
the increase in the subscription base, expressed as a percentage of
the mean subscription base between 30 June 2023 and 30 June
2024
5 Annualised data services revenue for the subscription base at
30 June, before deferred revenue, including revenue for units
waiting to be installed for which subscription payments have
already started or are committed, with comparative June 2023
measured at a constant exchange rate.
6 Invoiced subscription charges before provision for deferred
revenue
7 The change in average subscription
price of the base expressed as a percentage of the average
subscription price at 30 June, with comparative June 2023 measured
at a constant exchange rate.
Overheads on the face of the
Consolidated Statement of Comprehensive Income have been split
between Sales & Marketing expenses and Administration expenses,
with Sales & Marketing expenses including the costs of customer
acquisition being the investment in marketing expenditure and
payroll costs for the sales teams.
Andrew Walters, Executive Chairman of
Quartix, commented:
"The Company made very
substantial progress in the first half of the year: new
subscriptions increased by 13% compared to 2023 and this led to
record growth in annualised recurring revenues ("ARR"), which
increased by 11% to £30.9m over the past year. Two thirds of this
increase in ARR was achieved since January 1st.
Remaining operating and liquidation costs associated with the
Konetik acquisition were all taken in the first half and other
administrative and operating costs have been controlled well during
the period. The issues faced by the Company in 2023 have now been
put behind it, enabling it to refocus strongly on its core business
and to structure for further growth.
The Board is confident in the outlook for the remainder of the
year and now believes that both revenue and profit will moderately
exceed market expectations*. The Company looks forward to 2025 and
the future with confidence."
*Note: the Company believes
that, prior to this announcement, market expectations for 2024
performance in terms of revenue, adjusted EBITDA and unadjusted
free cashflow were £32.1m, £5.4m and £1.5m
respectively.
For further information,
please contact:
Quartix (www.quartix.com/en-gb)
01686 806 663
Andrew Walters, Executive
Chairman
Cavendish (Nominated Adviser and Broker)
020 7200 0500
Matt Goode / Seamus Fricker
(Corporate Finance)
Sunila de Silva (Corporate
Broking)
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Interim Financial Results
Report
The Group's Interim Financial
Statements for the 6 months ended 30 June 2024 are available in the
"Investors" section of our website at:
www.quartix.com/en-gb/company/investors
About
Quartix
Founded in 2001, Quartix is a
leading supplier of subscription-based vehicle tracking systems,
software and services. The Group provides an integrated tracking
and telematics data analysis solution for fleets of commercial
vehicles and motor insurance providers which improves productivity
and safety and which lowers costs by capturing, analysing and
reporting vehicle and driver data.
Quartix is based in the UK and is
listed on the AIM market of the London Stock Exchange
(AIM:QTX).
Chairman's
Statement
Summary
Renewed focus on the Company's core business drives strong
growth in recurring revenues and operating
profit.
The Company's Annualised Recurring
Revenue ("ARR") increased by £3.04m (+11%) in the 12 months from 1
July 2023 to 30 June 2024. Two thirds of this increase (£2.04m) was
achieved during the Period. ARR is the key forward-looking measure
of growth and financial performance for the Company.
Operating profit and profit before
tax for the Period increased by 13% to £2.7m (2023: £2.4m) despite
the Company incurring significant operating costs associated with
the liquidation of Konetik Deutschland GmbH ("Konetik") - as noted
later in this section. Without the operating costs of Konetik
pre-tax profit would have been 30% ahead of last year.
Company revenue grew by 10% to
£16.1m and the subscription base and new subscriptions increased by
12% and 13% respectively.
Pricing, revenue retention and attrition.
Average revenue per unit
subscription (average pricing) increased by 1% during the Period,
as inflationary price adjustment across the base offset the effects
of price erosion in some areas. The principal inflationary pressure
faced by the Company is that of wage growth in the service sector
and it will therefore review whether an index reflecting this
factor would be a more appropriate benchmark for future adjustments
(particularly as the cost benefits delivered by our systems for
customers are also linked to this).
Net revenue retention* was 98.9% in
the 6-month period to 30 June 2024 (2023: 96.5%). This result for
2024 would be 99.4% excluding the effects of the fixed-term UK
contract mentioned below.
Although attrition across the
Company rose to 14% the rise was attributable mainly to two
factors: the termination of a very large UK contract, installed in
2022, which had a fixed term of 2 years and which was not expected
to renew; and organisational issues in the USA which are discussed
below. The Board is not aware of any other large fixed-term
contracts in the base and is addressing the issues in the
USA.
*Note - Net revenue retention is
calculated by dividing the ARR of the remaining customer base at
the end of a period by the ARR value of that base at the start of
the period. It excludes the effects of new customer acquisition
during the period but includes the effects of upgrades and
additions to existing fleets and price changes.
Market performance
The key metrics shown below include
growth expressed as a percentage since 1 July 2023, with the
exception of the figures given for new subscriptions and new
customers, for which the growth shown is for the Period compared to
the same period in 2023.
|
Country
|
ARR
(£m)
|
%
|
Subscription Base (units)
|
%
|
Customer Base
|
%
|
New
Subscriptions (units)
|
%
|
New
Customers
|
%
|
|
UK/EI
|
17.27
|
+6%
|
151,477
|
+7%
|
11,457
|
+0%
|
15,786
|
+17%
|
792
|
+6%
|
|
France
|
8.01
|
+20%
|
74,740
|
+22%
|
8,708
|
+14%
|
11,842
|
+0%
|
1,246
|
+4%
|
|
USA
|
3.14
|
-2%
|
28,843
|
-5%
|
3,752
|
-6%
|
3,144
|
-17%
|
352
|
-29%
|
|
Italy
|
1.14
|
+62%
|
12,240
|
+56%
|
1,925
|
+47%
|
3,181
|
+56%
|
482
|
+88%
|
|
Spain
|
0.79
|
+41%
|
9,650
|
+46%
|
1,825
|
+37%
|
2,217
|
+30%
|
422
|
+28%
|
|
Germany
|
0.56
|
+61%
|
5,468
|
+50%
|
828
|
+40%
|
1,603
|
+98%
|
221
|
+73%
|
|
Other
|
0.05
|
|
574
|
|
91
|
|
90
|
|
3
|
|
|
Total
|
30.94
|
+11%
|
282,992
|
+12%
|
28,586
|
+9%
|
37,863
|
+13%
|
3,518
|
+11%
|
UK
The UK was the principal beneficiary
of renewed focus on the Company's core business following the
termination of the Evolve product line, and this led to 17% growth
in new subscriptions and a 7% increase in the subscription base on
a trailing-12-months' ("TTM") basis. Notable successes were
achieved in medium-sized fleets where the Company's reputation for
strong customer service played a significant role. A return to
growth in the customer base, albeit at a modest level, was
delivered in the period and strong emphasis on increasing growth in
customer acquisition rates is beginning to show positive
results.
France
The subscription and customer bases
grew by 22% and 14% respectively on a TTM basis. Customer
acquisition rates increased by 4% compared with the prior period.
New subscriptions were, however, flat on the same period last year
but 14% ahead of the second half of 2023, and good progress is now
being made through all channels.
ARR in France increased by 20% in
the 12 months to 30 June 2024.
USA
Performance in the USA has continued
to be adversely affected by organisational and marketing changes
made during 2022 and 2023. As a consequence, progress in ARR
reduced growth from +$0.5m in 2021 to a deficit of -$0.2m in 2023.
Recruitment is progressing to support the US business, return the
subscription and customer bases to growth and to return attrition
rates to former levels. Enquiry levels are very encouraging and
customer acquisition rates are improving.
Italy, Spain and Germany
Strong growth was recorded on all
key performance measures in each of these countries.
The combined ARR of these three territories grew
by 54% to £2.49m. New customer
acquisition rates in Italy were particularly strong, as was growth
in new installations in Germany. All three countries offer
substantial opportunities for business development and further
investment is planned for the second half of 2024 and into
2025.
Product development, systems and overheads
4G
upgrades in Europe
The cost of upgrading our
subscription base in France was provided for in the Company's
accounts for 2023. £0.4m of the original provision (£3.8m) was used
in the Period and a further 41,000 units remain to be
completed.
Our principal UK provider of mobile
data services is currently reviewing the size and usage of its 2G
customer network before considering the transition to 4G. We
believe that the UK 2G network is fundamentally different to that
in France in that it has been extensively used for a broad range of
fixed and mobile data services, particularly smart meters. Since
the beginning of 2023 Quartix has only used SIM cards in its
systems which have the capability of using any available 2G network
in the UK, as it is expected that 2G capacity will be necessary for
both smart meters and other remote monitoring applications for at
least the next five years.
Telematics developments
Quartix introduced a dashboard
camera option in March which provides both forward and
driver-facing camera options. It is fully integrated with Quartix's
telematics system and tracking application and has gained good
traction with a number of medium-sized fleets in the UK.
Development of the next generation
of telematics system is progressing well, with significant
enhancements to satellite positioning capabilities and reduction in
manufacturing cost. A further update on this will be provided in
the autumn.
Software and mobile applications
The Company's next generation of
browser-based user application will be launched to all users within
the next month for the main tracking functions. Development will
continue over the next 18 months in migrating the whole application
to this new user interface.
A similar fundamental upgrade to the
technology used in the Company's mobile applications will commence
by the end of the year. The project is in the architectural design
phase currently.
Systems and overhead effectiveness
Over the past 5 years the Company
has integrated new accounting, CRM, business and marketing systems
with its core SQL databases. The hosting of these databases has, in
turn, been transitioned to managed services in the Cloud (notably
with Microsoft Azure). Whilst these system changes offer
operational and maintenance advantages, the costs have been higher
than originally expected and steps will now be taken to ensure that
we optimise our use of them.
We continue to adapt our
organisational structure to focus on growth in our core telematics
business and have made some overhead cost reductions during the
Period, particularly in administrative functions.
Konetik
Quartix acquired Konetik in
September 2023 for a consideration of up to €3.9m. Konetik was a
company specialising in consultancy services for fleets making the
transition to electric vehicles. It had substantial operating costs
but insignificant revenues and the growth anticipated at the time
of acquisition was not delivered in the initial period
post-acquisition. As noted in March, and having exhausted all other
options including returning the business to its former owners at
nil cost, the Board decided to liquidate Konetik and its Hungarian
branch subsidiary.
The liquidation is well underway,
with all employment agreements, save for that for the
administrative managing director, terminated and settled.
Termination notices to Konetik's two external customers were given
in February and its limited trading activities have
ceased.
Operating costs of £0.28m for
Konetik were recorded in the Period, and a further provision of
£0.15m has been included in the Interim results for final costs. A
further payment of approximately £0.2m will be due in September
under the terms of the acquisition agreement.
Financial Performance
Group revenue for the period
increased by 10% to £16.1m (2023: £14.6m); the Company's core fleet
business represents more than 99% of revenues, 94% of this revenue
derives from recurring subscriptions. Operating profit and profit
before tax for the period increased by 13% to £2.7m (2023: £2.4m).
Adjusted EBITDA remained constant at £2.7m. The Company incurred
approximately £0.6m of operating costs associated with the
liquidation of Konetik and other items which are not expected to
recur in the second half of the year. Cash flow from operations
after tax and investing activities or free cash flow, fell to
£1.1m.
Net cash decreased to £2.7m at 30
June 2024 (June 2023: £3.2m; 31 Dec 2023: £2.4m), following the
acquisition, operating and liquidation costs of Konetik.
Basic earnings per share were 4.49p
(2023: 4.21p). On a diluted basis earnings per share were 4.37p
(2023: 4.16p).
Dividend Policy and Recommended Interim
Dividend
Subject to satisfactory performance
and market conditions, the Board will consider a final dividend for
the year with the aggregate of the interim and final dividend set
at approximately 50% of cash flow from operating activities less
the cost of the 4G upgrade in France, this will be calculated after
taxation paid but before capital expenditure. The Board will also
consider distributing the excess of cash balances over £2m by way
of supplementary dividends. The surplus cash would be calculated by
taking the year end cash balance and deducting the proposed regular
dividend. The policy will be subject to review. The Board has
recommended an interim dividend of 1.50p (2023: 1.50p) per share,
£0.7m in aggregate. The amount is in line with the Group's stated
policy on ordinary dividend payment. This was approved by the Board
on 26 July 2024. The interim dividend will be paid on 30 September
2024 to shareholders on the register on 30 August 2024. The
ex-dividend date is therefore 29 August 2024.
Governance and the Board
The Board is comprised of two
Non-Executive Directors: Alison Seekings and Ian Spence and myself
as Executive Chairman. The appropriate executive management
structure of the Board for the future of the Company is currently
under review.
For further details regarding
Corporate governance, please see the Company's investor website
(search: "Quartix investors").
Outlook
The Company has made very
substantial progress in the first half of the year, and the outlook
for the remainder of the year is positive. Remaining costs
associated with the Konetik acquisition have been incurred or
provided for in these accounts and costs have been controlled well
during the period. The issues faced by the Company in 2023 have now
been put behind it, enabling it to structure for further growth.
The Company will make targeted investments for growth in each of
its 6 geographic markets. This is expected to underpin further
significant financial progress in 2025 and beyond.
The Board is confident in the
outlook for the remainder of the year and now believes that both
revenue and profit will moderately exceed market expectations*. The
Company looks forward to 2025 and the future with
confidence.
*Note: the Company believes
that, prior to this announcement, market expectations for 2024
performance in terms of revenue, adjusted EBITDA and unadjusted
free cashflow were £32.1m, £5.4m and £1.5m
respectively.
Andrew Walters
Executive Chairman
Consolidated Statement of
Comprehensive Income
|
|
|
30 June
2024
|
30
June
2023
|
31
December
2023
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
Notes
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Revenue
|
2
|
16,105
|
14,623
|
29,882
|
|
Cost of sales
|
|
(4,959)
|
(4,477)
|
(12,904)
|
|
|
|
|
|
|
|
Gross profit
|
|
11,146
|
10,146
|
16,978
|
|
|
|
|
|
|
|
Sales & Marketing
expenses
|
|
(3,367)
|
(3,182)
|
(6,366)
|
|
Administrative expenses
|
|
(5,065)
|
(4,549)
|
(9,285)
|
|
Impairment
|
|
-
|
-
|
(2,695)
|
|
Fair value gain
|
|
-
|
-
|
312
|
|
|
|
|
|
|
|
Operating profit / (loss)
|
|
2,714
|
2,415
|
(1,056)
|
|
|
|
|
|
|
|
Finance income receivable
|
|
1
|
9
|
10
|
|
Finance costs payable
|
|
(19)
|
(15)
|
(31)
|
|
|
|
|
|
|
|
Profit / (loss) for the period before
taxation
|
|
2,696
|
2,409
|
(1,077)
|
|
|
|
|
|
|
|
Tax (expense) /credit
|
|
(521)
|
(373)
|
169
|
|
|
|
|
|
|
|
Profit /(loss) for the period
|
|
2,175
|
2,036
|
(908)
|
|
|
|
|
|
|
|
Other Comprehensive income:
|
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
|
|
Exchange difference on translating
foreign operations
|
|
104
|
3
|
43
|
|
Other comprehensive income for the year, net of
tax
|
|
104
|
3
|
43
|
|
Total comprehensive income attributable to the equity
shareholders of Quartix Technologies plc
|
|
2,279
|
2,039
|
(865)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
3
|
2,732
|
2,689
|
5,397
|
|
|
|
|
|
|
|
Earnings per ordinary share (pence)
|
4
|
|
|
|
|
Basic
|
|
4.49
|
4.21
|
(1.88)
|
|
Diluted
|
|
4.37
|
4.16
|
(1.88)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Financial Position
Company registration number:
06395159
|
|
|
30 June
2024
|
Restated
30
June
2023
|
31
December 2023
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
Assets
|
Notes
|
£'000
|
£'000
|
£'000
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
|
14,029
|
14,029
|
14,029
|
|
Property, plant and
equipment
|
|
599
|
786
|
684
|
|
Deferred tax assets
|
|
1,146
|
236
|
1,144
|
|
Contract cost assets
|
|
1,099
|
927
|
894
|
|
Total non-current assets
|
|
16,873
|
15,978
|
16,751
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
1,802
|
1,585
|
1,411
|
|
Contract cost assets
|
|
4,784
|
4,259
|
4,550
|
|
Trade and other
receivables
|
|
4,282
|
3,730
|
4,186
|
|
Cash and cash equivalents
|
|
2,671
|
3,249
|
2,380
|
|
Total current assets
|
|
13,539
|
12,823
|
12,527
|
|
|
|
|
|
|
|
Total assets
|
|
30,412
|
28,801
|
29,278
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
4,383
|
3,509
|
3,955
|
|
Provisions
|
|
2,042
|
147
|
2,775
|
|
Contract liabilities
|
|
3,688
|
3,870
|
3,679
|
|
Current tax liabilities
|
|
354
|
629
|
557
|
|
|
|
10,467
|
8,155
|
10,966
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Lease liabilities
|
|
446
|
589
|
520
|
|
Non-current provisions
|
|
1,679
|
-
|
1,443
|
|
|
|
2,125
|
589
|
1,963
|
|
|
|
|
|
|
|
Total liabilities
|
|
12,592
|
8,744
|
12,929
|
|
|
|
|
|
|
|
Net
assets
|
|
17,820
|
20,057
|
16,349
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Called up share capital
|
6
|
484
|
484
|
484
|
|
Share premium account
|
6
|
6,332
|
6,332
|
6,332
|
|
Equity reserve
|
|
310
|
470
|
392
|
|
Capital redemption reserve
|
|
4,663
|
4,663
|
4,663
|
|
Translation reserve
|
|
(191)
|
(335)
|
(295)
|
|
Retained earnings
|
|
6,222
|
8,443
|
4,773
|
|
Total equity attributable to equity shareholders of Quartix
Technologies plc
|
|
17,820
|
20,057
|
16,349
|
Notes to the Financial
Statements (unaudited)
1
Significant accounting policies
Basis of preparation
The financial information has been
prepared in accordance with recognition and measurement principles
of International accounting standards in conformity with the
requirements of the Companies Act 2006 ("IFRS (UK)") and in
accordance with those parts of the Companies Act 2006 that are
relevant to companies which report under IFRS (UK). The accounting
policies adopted are consistent with those of the financial
statements for the year ended 31 December 2023, as described in
those financial statements. In preparing these interim financial
statements, the Board has not sought to adopt IAS 34 "Interim
financial reporting".
The figures for the six-month
periods ended 30 June 2024 and 30 June 2023 have not been audited.
The comparatives for 30 June 2023 have been restated for the
amendment for IAS12: Income Taxes which required a deferred tax
asset and liability to be recognised for IFRS 16 leases, as
reflected in the consolidated financial statements of Quartix
Technologies plc for the year ended 31 December 2023.
The figures for the year ended 31
December 2023 have been extracted from, but do not constitute, the
consolidated financial statements of Quartix Technologies plc for
that year. The original financial statements for the year ended 31
December 2023 have been delivered to the Registrar of Companies and
included an Auditors' Report, which was unqualified and did not
contain a statement under section 498(2) or section 498(3) of the
Companies Act 2006.
Going concern
Global events continue to contribute
to adverse economic pressures and economic uncertainties. The
Company is taking appropriate action to monitor, address and
mitigate the uncertainties and increased risks facing the Company
as a result and have taken these additional uncertainties into
account in assessing the going concern position.
The Board takes all reasonable steps
to review and consider any factors that may affect the ability of
the Group to continue as a going concern. The Group's forecasts and
projections, taking account of reasonably possible changes in
trading performance, show that the Group is able to generate
sufficient liquidity. The Group enjoys a strong income stream from
its subscription base while current liabilities include a
substantial provision for deferred revenue which is a non-cash
item.
After assessing the forecasts and
liquidity of the business, for the next 18 months and the
longer-term strategic plans, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. The Group
therefore continues to adopt the going concern basis in preparing
consolidated financial statements.
Contract Cost Assets
The Group incurs costs to fulfil its
customer contracts, which include commission costs, equipment
costs, installation costs and carriage costs amongst other costs.
Costs to fulfil a customer contract are divided into:
·
costs that give rise to an asset; and
·
costs that are expensed as incurred.
When determining the appropriate
accounting treatment for such costs, the Group firstly considers
any other applicable standards. If those standards preclude
capitalisation of a particular costs, then an asset is not
recognised under IFRS 15.
If other standards are not
applicable to costs to fulfil a customer contract, the Group
applies the following criteria which, if met, result in
capitalisation of costs that:
·
directly relate to a contract;
·
generate or enhance resources that will be used in
satisfying (or in continuing to satisfy)
performance obligations in the
future; and
·
are expected to be recovered
The Group has determined that, where
the relevant criteria are met, that the commission costs, equipment
costs, installation costs and carriage costs are likely to qualify
to be capitalised as costs to fulfil a customer
contract.
The Contract Cost Assets are
amortised over the expected contract period on a systematic basis
that reflects the revenue stream generated by them, and this cost
is included in cost of sales. The expected contract term has been
calculated as an average of the population of new orders in the
year, and this calculation will be reviewed annually.
At each reporting date, the Group
determines whether or not the Contract Cost Assets are impaired by
comparing the carrying amount of the asset with the remaining
amount of consideration that the Group expects to receive less the
costs that relate to providing services under the relevant
contract.
2
Revenue
Revenues from external customers in
the Group's major markets have been identified based on the
customer's geographical location and are disclosed
below.
|
|
30 June
2024
|
30 June
2023
|
31
December 2023
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
£'000
|
£'000
|
£'000
|
|
Geographical analysis by destination
|
|
|
|
|
United Kingdom
|
9,497
|
9,136
|
17,997
|
|
France
|
3,891
|
3,269
|
6,882
|
|
Other European
territories
|
1,092
|
527
|
1,674
|
|
United States of America
|
1,625
|
1,691
|
3,329
|
|
|
16,105
|
14,623
|
29,882
|
3
Adjusted earnings before interest, tax, depreciation and
amortisation (EBITDA)
|
|
30 June
2024
|
30 June
2023
|
31
December 2023
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
Operating profit/(loss)
|
2,714
|
2,415
|
(1,056)
|
|
Depreciation on property, plant and
equipment, owned
|
24
|
41
|
76
|
|
Depreciation on property, plant and
equipment, right of use
|
76
|
77
|
157
|
|
EBITDA
|
2,814
|
2,533
|
(823)
|
|
Share-based payment expense (incl.
cash settled)
|
(82)
|
156
|
78
|
|
Impairment of intangible asset:
goodwill
|
-
|
-
|
2,464
|
|
Impairment of intangible asset:
software
|
-
|
-
|
231
|
|
Fair value gain on re-estimate of
future earn-out payments
|
-
|
-
|
(312)
|
|
Provision for replacement of 2G
units in France
|
-
|
-
|
3,759
|
|
Adjusted EBITDA
|
2,732
|
2,689
|
5,397
|
4
Earnings per share
The calculation of the basic
earnings per share is based on the profits attributable to the
shareholders of Quartix Technologies plc divided by the weighted
average number of shares in issue during the period. The earnings
per share calculation relates to continuing operations of the
Group.
|
|
Profits attributable to
shareholders
|
Weighted average number of
shares
|
Basic profit per share
amount
|
Fully
diluted
weighted average number of
shares
|
Diluted profit per
share amount
|
|
|
£'000
|
|
in pence
|
|
in pence
|
|
Earnings per ordinary share
|
|
|
|
|
|
|
Period ended 30 June 2024
|
2,175
|
48,382,178
|
4.49
|
49,726,850
|
4.37
|
|
Period ended 30 June 2023
|
2,036
|
48,382,178
|
4.21
|
49,025,795
|
4.16
|
|
Year ended 31 December
2023
|
(908)
|
48,392,178
|
(1.88)
|
49,088,054
|
(1.88)
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per ordinary share
|
|
|
|
|
|
|
|
Year ended 31 December
2023
|
4,294
|
48,392,178
|
8.87
|
49,088,054
|
8.75
|
|
|
|
|
|
|
|
|
|
|
For diluted earnings per share, the
weighted average number of ordinary shares is adjusted to assume
the conversion of all dilutive potential ordinary shares. Dilutive
potential ordinary shares are those share options where the
exercise price is less than the average market price of the
Company's ordinary shares during the period.
To illustrate the underlying
earnings for the year, the table above includes adjusted earnings
per ordinary share, which for 31 December 2023 excludes the £3.8m
re-estimate of the France 2G replacement unit provision recognised
in the year with its associated tax impact and the impairment on
the goodwill and other intangibles recognised on acquisition on
Konetik of £2.7m offset by the fair value gain on the re-estimate
of the future earn-out payments due under the share purchase
agreement for the purchase of Konetik.
5
Note to the cash flow statement
Cash flow adjustments and changes in
working capital:
|
|
30 June
2024
|
30 June
2023
|
31
December
2023
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
£'000
|
£'000
|
£'000
|
|
Profit / (loss) before tax
|
2,696
|
2,409
|
(1,077)
|
|
|
|
|
|
|
Foreign exchange
|
73
|
78
|
25
|
|
Depreciation
|
100
|
118
|
233
|
|
Interest income
|
(1)
|
(8)
|
(10)
|
|
Lease interest expense
|
19
|
15
|
31
|
|
Share based payment
expense
|
(82)
|
156
|
78
|
|
Impairment
|
-
|
-
|
2,695
|
|
Operating cash flow before movement in working
capital
|
2,805
|
2,768
|
1,975
|
|
|
|
|
|
|
(Increase)/ decrease in trade and
other receivables
|
(124)
|
(268)
|
(599)
|
|
(Increase)/ decrease in contract
cost assets
|
(439)
|
(899)
|
(1,157)
|
|
(Increase) / decrease in
inventories
|
(391)
|
405
|
579
|
|
(Decrease) / increase in trade and
other payables
|
(22)
|
(312)
|
3,504
|
|
Increase in contract
liabilities
|
8
|
396
|
163
|
|
Cash generated from operations
|
1,837
|
2,090
|
4,465
|
6
Equity
|
Allotted, called up and fully paid
|
Number of
ordinary shares of £0.01 each
|
Share
capital £'000
|
Share
premium £'000
|
|
|
|
|
|
|
At
1 January 2023
|
48,392,178
|
484
|
6,332
|
|
Shares issued
|
-
|
-
|
-
|
|
At
30 June 2023
|
48,392,178
|
484
|
6,332
|
|
Shares issued
|
-
|
-
|
-
|
|
At
31 December 2023
|
48,392,178
|
484
|
6,332
|
|
Shares issued
|
-
|
-
|
-
|
|
At
30 June 2024
|
48,392,178
|
484
|
6,332
|
There were no shares issued in the
period to 30 June 2024.