Interim Results for the six months ended 30 June 2016

cloudBuy plc (AIM: CBUY), the global provider of cloud-based ecommerce marketplaces and B2B buyer and supplier solutions, today announces its unaudited interim results for the six months ended 30 June 2016.

Key Points

Operational

• Signed and launched 3 way memorandum of understanding with Visa and Efinance for Egypt
• PHB Choices now live for all 209 CCGs to use
• Won and delivering SpendInsight project for New South Wales Health Share
• Continuing cost reduction initiatives, Administrative expenses are down £1.0m (28%) on H1 2015

Financial

• Turnover decreased by 11% from H1 2015 to £0.785m
• Turnover decreased by 9% from H2 2015
• Operating loss excluding share based payments decreased £0.947m (32%) to £1.999m (2015 £2.946m) as a result of cost saving initiatives
• Cash and cash equivalents as at 30 June 2016 were £1.947m (30 June 2015: £1.917m)
• Financing to raise up to £5.75m completed with existing shareholder Roberto Sella
• Loss per Share reduced 1.9p (2.6p 2015)

Ronald Duncan, Executive Chairman of cloudBuy, commented, “During the first half of the year we continued to re-focus the business around our key accounts and near term opportunities in ecommerce and further restructure the cost base accordingly.

We have continued to make good progress in those accounts whilst also developing further opportunities, particularly in the Middle East and Asia Pacific. Our focus remains on closing prospects for ecommerce traditional licence revenue, whilst continuing to pursue the larger ecommerce opportunities for transactional revenue and whole country solutions that we have been developing.”

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About cloudBuy plc

cloudBuy, (AIM: CBUY), provides cloud solutions for buyers and sellers – and brings them together to trade securely and ethically via an increasing number of public e-marketplaces and private purchasing portals around the world, powered by cloudBuy ecommerce technology.

cloudBuy solutions for buyers help B2B purchasers understand and control their spend, to reduce costs and increase value. Our cloudSell solutions enable sellers of all sizes, from startups to corporates, reach new customers and grow their business.

cloudBuy’s technology platform powers web sites, public marketplaces and private purchasing portals that enable all types of online interactions and relationships including, citizen and business to government; consumer to business; and business to business.

For more information visit: www.cloudbuy.com 

Twitter: @cloudbuyplc

CHAIRMAN'S STATEMENT

Operational

We continue to focus on a small number of key accounts in order to drive revenues.  Amongst these are PHB Choices and CII marketplace, both of which are in the on boarding phase for suppliers.

With PHB Choices we have had good uptake with CCG’s to date, and are now working with them to ensure that their suppliers are live in order to bring on the personal budget holders.  Whilst there is no mandate for the CCG’s to use PHB Choices, it has been welcomed by the CCG’s as it provides a scalable, transparent and auditable solution to the challenges posed by the roll out of PHB’s. We have agreed to waive the fixed fees for the initial CCG’s in order to encourage rapid ­­­­­adoption.

The CII marketplace is live and suppliers are gradually coming on board.

To date, there are over 400 suppliers registered with over 7,000 products able to be purchased. Once a critical mass of suppliers and products is achieved, CII and cloudBuy will increase marketing efforts to attract buyers to the marketplace.

We are pleased to have won new licenced based contracts with HealthShare NSW in April 2016 and, post period end, University of Exeter in July 2016.

The purchasing portal for the York Region District School Board in Canada is nearing pilot. This has progressed in line with management's expectations during the 6 month project to implement finance integration and develop new functionality for the wider Ontario schools market.  This will be beneficial as we target other schools’ boards in North America. To date, 22 boards have expressed an interest in our solution, out of a total addressable market of 72.  Our experience with York Region will enable us to roll out future projects in a quicker time frame.  A small amount of revenue was recognised in the first half with higher revenue expected to be recognised in the second half of 2016.

More generally we have an active pipeline of eProcurement prospects across the UK, USA, Canada, Australia, India and the Middle East.  This is our traditional business and these are licence revenue opportunities, as opposed to transactional revenue from the new marketplaces.

In Egypt we have progressed rapidly from an introduction by Visa in February to signing a 3 way memorandum of understanding between cloudBuy, Visa and Efinance. The whole country initiative for all cloudBuy technologies was launched by UK Trade Envoy, Sir Jeffrey Donaldson MP and Yasser ElKady, Egyptian Minister of Communications and Information Technology on 26^th July. The initiative is supported by the Federation of Egyptian Chambers of Commerce and the Union of African Chambers of Commerce.

The cost control initiatives are continuing, as part of these, we are restructuring the Coding International Limited subsidiary which has resulted in the redundancy of 4 of the 7 employees. Revenue from this business is down by nearly 50% in H1.

Funding

We are delighted to have agreed the financing package with Roberto Sella and associates totalling £5.75m which was approved in a shareholders meeting on 26 April 2016. To date, £3.274m has been utilised.

Financial Results

Turnover decreased by 11% from H1 2015 to £0.785m, turnover decreased by 9% from H2 2015.

Administrative expenses, excluding share based payments, decreased to £2.643m (2015: £3.658m).

After a charge for share based payments of £0.348m (2015 £0.217m), the operating loss decreased to £2.347m (2015 £3.163m).

Cash and cash equivalents as at 30 June 2016 were £1.947m (30 June 2015: £1.917m) reflecting the losses incurred, offset by the Roberto Sella financing

Net assets as at 30 June 2016 were £(0.497m) compared to £2.025m at 30 June 2015.  

Outlook

The Company’s realignment of its cost base will continue throughout the remainder of the year.

Revenue from projects already won should result in an increase in revenue in the second half of the year compared to the first and deliver a full year performance in line with last year, as well as providing contribution in the coming years.

Going forward, we believe that the current contracted mix of licenced business together with larger transaction based revenue projects will enable us to grow revenues in the medium term, whilst also developing further opportunities.

Contribution from new wins in the year should result in some increase in revenue in H2 over H1.

Ronald Duncan
Executive Chairman
12 August 2016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

Revenue and operating loss all derive from continuing operations.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation

These interim financial statements have been prepared in accordance with the accounting policies set out in the Annual Report and Accounts for the year ended 31 December 2015 and the interpretation of those accounting standards underlying the accounting policies. IAS 34, Interim Financial Reporting, has not been applied.  The interim financial statements have been issued in accordance with the AIM Rules of the London Stock Exchange and are unaudited.  The financial information set out does not constitute statutory accounts for the purposes of section 434 of the Companies Act 2006.  The auditors’ report on the statutory accounts for the year ended 31 December 2015 which have been filed with the Registrar of Companies was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The preparation of financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the estimates are based on management’s best knowledge of the amounts, events or actions, actual results may differ from those estimates.

This announcement which was approved by the board of cloudBuy plc on 11 August 2016 will be published on the company’s website at www.cloudbuy.com.

2. Revenue (unaudited)

Set out below is an analysis of revenue recognised and gross profit attributable between reportable segments:

3. Loss per share (unaudited)

The calculations for loss per share are based on the weighted average number of shares in issue during the period 129,499,528 (6 months to 30 June 2015: 121,442,045; year ended 31 December 2015: 124,641,446) and the following losses:

The share options and warrants are not dilutive as they would not increase the loss per share in the year.

The basic and diluted loss per share calculated on the adjusted earnings is 1.6p (6 months to 30 June 2015: 2.4p; year ended 31 December 2015: 4.3p).

4. Convertible Loan Stock and Loan Stock

The principal terms of the loan instruments are as follows :

5. Disclosure of Concert Party Shareholdings

The following details are required to be disclosed in this report to comply with the conditions of The Takeover Code. Mike Pasternak who is a director of cloudBuy is deemed to be acting in concert with Roberto Sella for the purposes of the Takeover Code. The holdings of Roberto Sella and Mike Pasternak are as follows: