BMIT Technologies plc - Interim Results
On 8 August 2019, BMIT Technologies plc (“BMIT”) published its condensed interim financial statements for the six-month period ended 30 June 2019. These are the first set of condensed interim financial statements issued by BMIT following the IPO which took place in January 2019.
Performance Overview
During the first six months of 2019, revenues increased by 4.4% to €11.2 million as the company experienced growth in all of its main incomes streams, namely co-location services (+2%), power (+13%), connectivity (+18%) and cloud services (+14%). However, the growth in business was offset by the higher increase in costs which amounted to €7.39 million compared to €6.84 million in H1 2018. In this respect, BMIT explained that the increase in its cost base is the result of additional investments in HR as well as higher professional fees in relation to the listing of its shares on the MSE Regulated Main Market. Excluding depreciation and amortisation charges, EBITDA improved by 4.7% to €5.1 million compared to €4.9 million in the first six months of 2018. However, this increase is due to the impact from the introduction of accounting rule IFRS 16 – ‘Leases’ which came into effect on 1 January 2019 and resulted in an increase in the EBITDA line item of €0.3 million.
Overall, BMIT reported an operating profit of €3.78 million, representing a decline of 2.2% when compared to the corresponding period last year. After accounting for a minimal net finance cost of €0.06 million, BMIT reported a pre-tax profit of €3.71 million. The tax charge for the period under review amounted to €1.37 million, resulting in a net profit of €2.34 million which, in turn, translates into an annualised return on equity of 58%.
From a cash perspective, BMIT generated net cash from operating activities of €3.93 million during the period under review, representing an increase of 6.9% over the previous corresponding period. Furthermore, despite the higher cash used in the purchase of property, plant and equipment, the company’s free cash flows were boosted by the cash outflow of €1.87 million which took place in H1 2018 relating to the acquisition of the remaining shares of Kinetix IT Solutions Ltd which was not repeated in the first half of 2019. As a result, free cash flows generated during the period under review amounted to €3.28 million compared to €1.53 million in H1 2018.
The condensed Statement of Financial Position as at 30 June 2019 compared to the corresponding figures as at 31 December 2018 shows that net assets increased by 34.1% to €9.22 million largely reflecting the substantial increase in the company’s cash balances to €2.8 million compared to €0.67 million as at the end of 2018. This was partially offset by the increase in current tax liabilities to €1.15 million (31 December 2018: €0.18 million). Meanwhile, BMIT also recognised the value of its ‘right-of-use’ assets as well as the value of its lease liabilities on its balance sheet. These resulted in an increase in the company’s balance sheet size by €4.9 million.
Dividend
As explained in the IPO Prospectus dated 7 January 2019, BMIT Technologies plc paid €4 million in cash dividends to GO plc during 2018. Although the Directors of the company resolved not to declare an interim dividend, the IPO Prospectus also stated that BMIT is expected to declare a final net dividend per share of €0.0216 per share to all shareholders for the current financial year ending 31 December 2019. Moreover, BMIT also projected a net dividend per share of €0.024 to all shareholders for the 2020 financial year.